The Situation in Which the Long-Run Average Cost Curve Exhibits

question 98

Essay

The situation in which the long-run average cost curve exhibits economies of scale over the entire range of output is called a "natural monopoly." Explain why,in the case of a natural monopoly,it would be cost efficient to have a single firm serve the entire market.

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Definitions:

Probability

The calculation of an event's chance of happening, depicted on a scale from 0 to 1.

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Safety Roadblock

A temporary setup on roads by law enforcement or construction workers aimed at ensuring public safety by controlling or redirecting traffic.

O-Negative Blood

A blood type that lacks antigens in the ABO blood group system and the Rh factor, making it universally transfusable to patients of any blood type.