Question

A natural monopoly exists when a single seller experiences ____________ average total costs than any potential competitor.

Answer 1

Answer:

lower

Explanation:

A natural monopoly appears when there are high entry costs like large infrastructure costs or economies of scale where a company can provide the products at a lower costs than others which provides a big advantage to the firm in the market and makes it difficult for any potential competitor to be able to compete. According to that, the answer is that a natural monopoly exists when a single seller experiences lower average total costs than any potential competitor as this represents a barrier for the competitor to be able to enter the market.