Question

Distinguish between Natural monopoly and social monopoly.

Answer 1

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Answer 2

Answer:

As per the question

Distinguish between Natural monopoly and social monopoly

Natural monopoly

Natural  monopoly one can produce the socially optimal quantity at the lowest cost due to economies scale.

A natural monopoly is a company which provides a product on the market; market entry for competitors is difficult because of high cost or other barriers. Therefore, the natural monopoly company is the only one to offer that particular product on the market.

Social monopoly

Monopoly creates a social cost, called a dead weight loss, because some consumers who

would be willing to pay for the product up to its marginal cost (MC), are not served.