monopoly 2 Flashcards
natural monopoly (the production process)
a type of monopoly that arises because a single firm can supply a good or service at a lower cost than a larger number of firms
ex: BEL & BWS
Why is natural monopoly cheaper?
the costs are spread over a larger # of units produced.
why is there not a lot of firms? why is a NM better?
costs are spread out
damage to the environment or space
population- the size of the population determines of whether a firm is a NM
population size
large population= CM (many customers)
Small population= NM (competing for the same ppl)
the key difference between a competitive firm & a monopoly is …
the monopoly’s ability to influence the price of its output.
because a monopoly is a sole provider in its market, its demand curve is the __________-
market demand curve
