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From course:

Economics A Level (DONEEEEEEE)

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Question:

What are Natural Monopolies and why do they occur?

Author: eric_galvao



Answer:

-Industries when the Fixed Costs are High and Huge Economies of Scale can develop tend to lead to Monopolies developing. -If more than 1 Firm existed, then they’d all have the High Fixed Costs which would affect the Consumer -Monopolies may be more Efficient than Competition. (Take Water. What’s the point of several Firms laying Separate Pipes?)


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