With a natural monopoly, the minimum price a single firm must charge to make a profit:
A) is lower than the price two or more firms would have to charge.
B) is always higher than the price two or more firms would have to charge.
C) is equal to the price two or more firms would have to charge.
D) is half the price two or more firms would have to charge.

Question

Quizplus · Accepted Answer

In a natural monopoly, a single firm can produce at a lower cost due to economies of scale, so the minimum price it must charge to make a profit is lower than what two or more firms would need to charge.

With a Natural Monopoly, the Minimum Price a Single Firm