Asked by
J.G.N. Vogelzang
on Nov 05, 2024
Verified
For a firm to be a natural monopoly, economies of scale must be realized at a scale that is close to total demand in the market.
Economies of Scale
The financial advantages gained by companies due to their operational scale, where there's a general decline in the cost per unit of output with the growth in scale.
Total Demand
The entire quantity of a particular good or service that all consumers in a market want to purchase at various price levels during a specified time period.
- Assess the importance of scale economies in the creation and endurance of monopoly markets.
Verified Answer
LL
Learning Objectives
- Assess the importance of scale economies in the creation and endurance of monopoly markets.