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1)what will happen to the Output compared to the situation where MR=MC ?

2)what will happen to the Output compare to Competitive Output?

Attempt at Soln. :
1)
2) so definitely quantity of o/t for monopoly < quantity of competitive o/t .

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1 Answer 1

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What you are describing is called a "natural monopoly". Real life examples are of electric and water companies. Natural monopolies should not be split up by anti-trust laws because they are still producing on a part of the ATC curve where they experience economies of scale.

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