Re: Econ / Monopoly Question
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It may be the case that one firm can have lower costs than many due to economies of scale. There are two cases with these low costs:
-They will pass their low costs on to consumers. In this case the consumers are served best by having a monopoly and I don't see the problem.
-They will use their "monopoly" position to attempt to charge exorbitant prices, in which case a new firm can enter the market and compete, with costs higher than firm A's but consumer costs lower than A's
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Or case three that the firm charges just high enough prices that no one could undercut them.
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Which is still not a problem.
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Never claimed it was.
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