Question
Natural monopolies exist when it is less expensive for one firm to produce all of an industrys output than it is for multiple firms to
Natural monopolies exist when it is less expensive for one firm to produce all of an industry’s output than it is for multiple firms to each produce a share of that output. Despite this cost efficiency, natural monopolies still produce an inefficient level of output. Using graphical analysis to aid in your answer demonstrate why this inefficiency exists and explain why there is no regulative course of action that a government can take to eliminate the inefficiency.
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Microeconomics An Intuitive Approach with Calculus
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