The condition where a single firm can supply an entire market at a lower unit cost than could a number of competing firms defines a

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a firm can supply a good or service to an entire market at a lower cost than any potential competitor. This is often due to economies of scale, where the firm can spread fixed costs over a large volume of production, resulting in lower average costs. In this situation, it would not make sense for other firms to enter the market, as they would not be able to compete with the low prices of the natural monopolist.

The Condition Where a Single Firm Can Supply an Entire