why-do-high-fixed-costs-and-low-variable-costs-lead-to-a-natural-monopoly-in-ind

Question

Why do high fixed costs and low variable costs lead to a natural monopoly in industries like utilities?

Accepted Answer

They create a cost advantage for a single firm to supply the entire market.

Answer

They make it more efficient for multiple firms to operate.

Answer

They lead to higher prices for consumers.

Answer

They encourage competition among many small firms.