Natural Monopoly of Economics

Discipline: Economics

The existence of an industry (gas, electricity, water, for example) in which the average costs of production per unit fall as output increases.

A single firm operating in the industry (a monopoly) can produce output more efficiently than several competing firms under these circumstances.

Also see: monopoly

Source:
W W Sharkey, The Theory of the Natural Monopoly (New York and Cambridge, 1982)

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