1.   Costs can be rising in a natural monopoly industry.

2.   First, they are related to subadditivity - the question of whether or not the industry is a natural monopoly.

3.   In principle, in some natural monopoly industries outside controls are superfluous.

4.   Other Western countries face the same problem of natural monopoly in these industries.

5.   Our concern essentially is with the first of these possibilities, the case of natural monopoly - no competition is possible.

6.   Perhaps such arguments are beside the main point, which is to cover the natural monopoly case.

7.   The most fundamental question is, do the two sets, namely natural monopolies and perfectly contestable industries, in fact intersect?

8.   The problems of choosing an appropriate framework for any privatised natural monopoly have already been considered.

9.   The purpose of these calculations has been to demonstrate that rising average cost is consistent with natural monopoly.