Explaining Natural Monopoly
- A-Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 24 Mar 2019
In this study note we explore the key concept of natural monopoly.
What is a natural monopoly?
For a natural monopoly the long-run average cost curve (LRAC) falls continuously over a large range of output. The result may be that there is only room in a market for one firm to fully exploit the economies of scale that are available and therefore achieve productive efficiency.
Evaluation Skills: Natural Monopoly Revision Video