In which of the following situations would a natural monopoly exist?
A)only one firm is supplying a natural resource
B)a firm has a government charter to be the sole producer of some good
C)a firm is able to operate at the minimum point of its long- run average total cost curve
D)a firm produces a product essential to national security
E)one firm can most efficiently supply the entire market demand

Question

Quizplus · Accepted Answer

A natural monopoly exists when a single firm can supply the entire market demand more efficiently than multiple firms, typically due to high fixed costs and economies of scale.

In Which of the Following Situations Would a Natural Monopoly