![]() The source of this occurrence is the huge initial fixed costs, which gives a large independent firm an advantage of lower average total cost over two or more smaller firms. The diagram below shows a common phenomenon in natural monopoly industries, increasing returns to scale, in which as output increases, average total cost falls. This proclamation can be primarily attributed to the company’s significant amount of market share, economies of scale, and the network effects. The chairman and CEO of Berkshire Hathaway, Warren Buffett, claimed in an interview that Google’s search ad business acts like a natural monopoly that can fend off any potential competitors. ![]() Write my paper Body Why google is a natural monopoly?
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