Asked by
Kaitlyn Paciolla
on Oct 08, 2024Verified
Which of the following is not a possible source of natural monopoly?
A) Large-scale network effects.
B) Simultaneous consumption.
C) Greater use of specialized inputs.
D) Rent-seeking behavior.
Natural Monopoly
A situation in the market where due to high initial costs and substantial economies of scale, a single firm can supply a product or service at a lower cost than any potential competitor, leading to a market dominated by one supplier.
Network Effects
Increases in the value of a product to each user, including existing users, as the total number of users rises.
Rent-seeking Behavior
Activities undertaken by individuals or firms to increase their own wealth without creating new wealth, often through manipulating the social or political environment in which economic activities occur.
- Identify and understand different sources and consequences of natural monopoly.
Verified Answer
MJ
Learning Objectives
- Identify and understand different sources and consequences of natural monopoly.