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A natural monopoly exists when economies of scale make it much cheaper, on average, if just one firm produces. Consumers just naturally prefer one seller to another. The government grants a ________.
A natural monopoly exists when economies of scale make it much cheaper, on average, if just one firm produces. Consumers just naturally prefer one seller to another. The government grants a ________.
A natural monopoly arises when a single firm can supply a market more efficiently due to economies of scale, and the government may grant a government-grantedmonopoly to regulate this single supplier.A natural monopoly occurs when a single firm can supply the entire market's demand more efficiently and at a lower cost than any combination of multiple firms. This situation arises due to economies of scale, where the average total cost continues to decline as the output increases. In such industries, the marginal cost of serving an additional customer is minimal compared to the initial investment in infrastructure, making it impractical and expensive for new competitors to enter the market.When a natural monopoly is present, the government may grant what is known as a government-granted monopoly, giving a private firm the exclusive right to provide a good or service. This differs from a government monopoly, where the agency itself retains the monopoly. Governments regulate these monopolies to prevent abuse of power and to ensure fair pricing and service quality for consumers....