Asked by
Natalie Beres
on Nov 16, 2024Verified
A natural monopoly will always operate in the region of the long run average total cost curve where the cost per unit is constant.
Natural Monopoly
A market situation where a single firm can supply a product or service to an entire market at a lower cost than what two or more firms can.
Long Run
In economics, a period during which all inputs, including capital, are variable and firms can enter or exit the industry, allowing full production adjustment.
Average Total Cost
The per unit cost of production, calculated by dividing the total cost by the quantity of output produced.
- Understand the characteristics and implications of natural monopolies.
Verified Answer
HH
Learning Objectives
- Understand the characteristics and implications of natural monopolies.