Natural Monopoly

Suppose that the monopoly shared the market demand and output sold with a second firm, and that each firm produced half of the market output (1.5 kw/h).

The cost of producing 1.5 kw/h would exceed the price the firms can receive, thus they would suffer losses.

Suppose that the monopoly shared the market demand and output sold with a second firm, and that each firm produced half of the market output (1.5 kw/h).