Question

On the basis of Causes of Emergence of monopoly, write a short note on NATURAL MONOPOLY.

Answer 1

Natural Monopoly arises in situations where one firm can supply a good or service to the entire market at a lower price than two or more firms can. In case of natural monopolies the long-run average cost curve is declining for higher levels of output.So the larger is the quantity of goods a single firm is producing the lower is the average cost per unit of output.