Question

When does a natural monopoly arise?

Answer 1

A natural monopoly is a type of monopoly that exists due to the high fixed or start-up costs of conducting a business in a specific industry. Additionally, natural monopolies can arise in industries that require unique raw materials, technology or similar factors to operate. Since it is economically sensible to have some monopolies like these, governments allow them to exist, but provide regulation, ensuring consumers get a fair deal.

Answer 2

A natural monopoly is a type of monopoly that exists due to the high fixed or start-up costs of conducting a business in a specific industry. Additionally, natural monopolies can arise in industries that require unique raw materials, technology or similar factors to operate