Question

The demand curve intersects the natural monopolist's long-run average total cost curve at a point where long-run average total costs are still falling, due to ______.

Answer 1

The demand curve intersects the natural monopolist's long-run average total cost curve at a point where long-run average total costs are still falling, due to economies of scale.

What are economies of scale?

Economies of scale are the advantage of the cost that the enterprise gets due to the operation's scale.

The simple meaning of economies of scale is to get more profit by doing simple things, such as buying in bulk, etc.

Scale can be increased by lowering the cost per unit of output.

Thus, the correct fill the blank is economies of scale.

Learn more about economies of scale

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