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Natural monopoly arise under the conditions when the smallest average cost of manufacturing take place at a rate of output adequate, nearly enough or extra than enough to supply the total market at a price covering the full cost.
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The world market for copper, for instance, contains a few dozen major producers. That number is enough for the impact on price to be negligible if anyone producer goes out of business. The same is true for many other natural resources markets like coal, iron, tin and lumber in the Unites States. Other markets containing a small number of producers may still be treated as competitive for purposes of analysis.
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