Asked by jesus salazar on Jun 05, 2024
Verified
There are only two justifications for monopoly: ______________ and _____________.
A) economies of scale;natural monopolies
B) economies of scale;patents
C) natural monopolies;patents
D) imperfect competition;being established
Economies of Scale
Cost advantages achieved when an enterprise increases production and efficiency, reducing the cost per unit.
Natural Monopolies
A type of monopoly that occurs when a single firm can supply a good or service to an entire market at a lower cost than two or more firms.
Patents
Legal rights granted to inventors or assignees for a certain period of time, allowing them to exclude others from making, using, or selling an invention.
- Clarify the contribution of public utilities and natural monopolies to economic activities.
- Examine the economic justifications for patents and government-sanctioned monopolies.
Verified Answer
NF
Nurul Fariha Abdul MuhsinJun 09, 2024
Final Answer :
A
Explanation :
Economies of scale and natural monopolies are recognized justifications for monopoly because they can lead to lower costs and prices for consumers. Economies of scale occur when increased production leads to lower costs per unit, which can justify a single producer. Natural monopolies occur in industries where high infrastructure costs make multiple competitors inefficient, such as utilities.
Learning Objectives
- Clarify the contribution of public utilities and natural monopolies to economic activities.
- Examine the economic justifications for patents and government-sanctioned monopolies.