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Why do governments usually support and regulate natural monopolies?

A two or more firms are cost-prohibitive

B competition makes prices lower in a natural monopoly

C owners of natural monopolies do not know how to manage them efficiently

D itis difficult to keep up with advancing technology

Sagot :

Answer:

c

Explanation:

A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is a utility company

A natural monopoly occurs due to the high start-up costs or a large economies of scale.

Natural monopolies are usually the only company providing a service in a particular region. there is no competition in a natural monopoly so prices tend to be high. government intervenes in a monopoly to ensure that customers are treated fairly  

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