Firms in an industry where economies of scale are sufficiently large that if two or more firms were to be involved in the production of the industry output, unit cost would be higher than for a monopoly are called:

Question

Quizplus · Accepted Answer

Natural monopolies exist when economies of scale are so large that a single firm can produce the entire industry output at the lowest cost, and any additional firms entering the market would face higher unit costs, making it difficult for them to compete with the existing firm. Thus, natural monopolies have a significant advantage over other firms in the industry, making it difficult for new competitors to enter.

Firms in an Industry Where Economies of Scale Are Sufficiently