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Study Notes

Explaining Natural Monopoly

Level:
A-Level, IB Diploma
Board:
AQA, Edexcel, Eduqas, IB, OCR, WJEC

Last updated 24 Mar 2019

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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

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