🎴 Flashcard Mode
The Regulation of Natural Monopolies
Card1 / 15
Mastered0
Review0
QuestionClick to flip
What is a natural monopoly?
AnswerClick to flip back
A
A market where a single firm can produce a good or service at a lower cost than multiple firms.
💡 Explanation:
A natural monopoly arises when the average cost of production decreases as the quantity produced increases. This means that a single firm can produce the good or service at a lower cost than multiple firms, making it more efficient for a single firm to serve the entire market.