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Which of the following is an example of a natural monopoly?
Bookshop
Railways
Apple store in delhi
Malls
Railways
A natural monopoly occurs when a single firm can supply a good or service to an entire market at a lower cost than two or more firms could, typically due to massive infrastructure requirements. In the case of railways, the high fixed costs of laying tracks and signaling systems make it inefficient for multiple companies to build competing networks, creating a market structure where one provider is natural.
A natural monopoly occurs when a single firm can supply a good or service to an entire market at a lower cost than two or more firms could, typically due to massive infrastructure requirements. In the case of railways, the high fixed costs of laying tracks and signaling systems make it inefficient for multiple companies to build competing networks, creating a market structure where one provider is natural.
The Indian Railways is governed by the Ministry of Railways, and its management is overseen by the Railway Board, established under the Indian Railways Act, 1890.
A natural monopoly arises due to high barriers to entry, such as exclusive control over natural resources or expensive infrastructure.
Economies of scale make it cheaper for one large provider to serve the market than many small firms.
Public utilities like water supply, electricity grids, and railways are classic textbook examples of natural monopolies.
A Bookshop is not a monopoly because there are low barriers to entry and high competition.
Malls and stores (like Apple) operate in a monopolistic competition or oligopoly structure where consumers have many alternative brands.
Unlike artificial monopolies, natural monopolies are often regulated by governments to prevent price exploitation.
Option B is correct тАФ Railways are a natural monopoly due to the prohibitive cost of infrastructure duplication.
Link this to the 'Public Sector Undertakings (PSUs)' chapter in Economy, as most natural monopolies in India are state-run to ensure essential service affordability.
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