A natural monopoly is defined as
A) a market in which competition and entry are restricted by the granting of a government license.
B) an industry in which economies of scale allow one firm to supply the entire market at the lowest possible cost.
C) a market in which competition and entry are restricted by the granting of a patent.
D) any market where one firm constitutes the entire industry.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can supply the entire market at a lower cost than any combination of multiple firms, due to economies of scale.

A Natural Monopoly Is Defined as