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hichkok12 [17]
3 years ago
15

A local electricity - generating company has a monopoly that is protected by an entry barrier that takes the form of:________. a

. economies of scale. b. perfectly inelastic demand curve. c. control of a key raw material. d. network externalities.
Business
1 answer:
lisov135 [29]3 years ago
4 0

Answer:

a. economies of scale.

Explanation:

Local electricity companies generally have natural monopolies resulting from both economies of scale and/or control of natural resources. Economies of scale refers to the average total costs decreasing as the total output generated by the company increases. For example, it is extremely expensive to generate electricity for 1 single home, but the average total cost for generating electricity for 1 million homes is very low. Generally utilities are monopolies because it is very expensive to set and start operating the company, but once it is operating its average costs per consumer are very low.

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Rashid [163]
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3 years ago
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stellarik [79]

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Explanation:

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