Economics · Digital Economy
Digital markets may resemble natural monopolies primarily because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Supply is perfectly competitive across all digital sub-sectors
- 2Consumers inherently prefer state-mandated monopoly regulation
- 3Large fixed infrastructure costs and network effects favor a single dominant firm✓
- 4Marginal costs increase rapidly with each additional user
Correct answer
Large fixed infrastructure costs and network effects favor a single dominant firm
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