It is advantageous to provide services which are natural monopoly through?
Answer Details
A natural monopoly occurs when it is more efficient for a single company to provide a particular product or service rather than having multiple companies competing in the market. This is because the fixed costs of providing the product or service are high, while the marginal costs of production are low.
In such cases, it is advantageous to provide these services through public enterprises, which are owned and operated by the government. This is because the government has the authority and resources to regulate and control the natural monopolies, ensuring that they are run efficiently and at reasonable prices. Public enterprises also have access to government funding, which allows them to invest in research and development and improve the quality of their services.
Another advantage of providing natural monopolies through public enterprises is that they can prioritize social welfare over profits. This means that they can provide services to underserved areas or vulnerable populations that may not be profitable for private companies to serve.
In summary, it is advantageous to provide natural monopoly services through public enterprises because they can be regulated and run more efficiently, have access to government funding, and can prioritize social welfare over profits. Therefore, options such as sole trades, partnership, public limited liabilities companies, and co-operative societies are not ideal for providing natural monopoly services.