natural monopoly

[ranjankumarnayak5]

For a natural monopoly, economies of scale
(A) Exist due to patent protection
(B) Cause legal barriers to entry
(C) Exist over in the long-run average cost curve over the entire range of output
(D) None of the above

Ans:c

[ranjankumarnayak5]

SOME ONE PLEASE CLEAR MY DOUBT.

[SM]

Hi Rajan,

In a natural monopoly, long run average cost is falling and hence economies of scale persist all along the long run average cost curve.

[ranjankumarnayak5]

Hi SM,
Then I was right.

thanks,
ranjan