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TheMBAGlover

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tT
发表于 2011-7-13 16:28 | 只看该作者

Question About Natural Monopolies

single, monopoly, Natural, natural, likely
A natural monopoly is most likely to exist when:

a) economies of scale are great

b) ATC increases as output increases

c) a single firm owns essentially all of a productive resource


The answer is A, but I'm confused as to why the answer is not C. Any help?
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sdada

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发表于 2011-7-13 16:28 | 只看该作者
In Natural Monopoly, the very reason why there is a monopoly is because that business is not economically feasible for other firms...they may have the resources but capital reqt are generally high...so to reduce cost they have to more

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JRossSter

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3#
发表于 2011-7-13 16:28 | 只看该作者
nuppal Wrote:
-------------------------------------------------------
> varundarji Wrote:
> --------------------------------------------------
> -----
> > In Natural Monopoly, the very reason why there
> is
> > a monopoly is because that business is not
> > economically feasible for other firms...they
> may
> > have the resources but capital reqt are
> generally
> > high...so to reduce cost they have to more
>
>
> Not entirely true. For instance, some of the
> Utilities companies hold monopolies in regions
> because of governemnt regulartions preventing
> pricing wars. Although the structure is more of an
> Oligopoly, in reality it is a monopoly.


get em Nuppal.

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