A natural monopoly
A) exists when many sellers experience lower average total costs than potential
Competitors do.
B) exists when a firm has sole ownership of a natural resource.
C) is an example of a government-created barrier.
D) is needed to make a profit in the long run.
E) exists when a single seller experiences lower average total costs than any potential competitor.

Question

Quizplus · Accepted Answer

A natural monopoly exists when a single seller experiences lower average total costs than any potential competitor, making it difficult for new firms to enter the market and compete. This can be due to economies of scale, network effects, or control of essential resources or technologies.

A Natural Monopoly