An industry is a natural monopoly when (i)
The government assists the firm in maintaining the monopoly.
(ii)
A single firm owns a key resource.(iii)
A single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.
A)(ii) only
B)(iii) only
C)(i) and (ii) only
D)(ii) and (iii) only

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms. Government assistance or a single firm owning a key resource may contribute to the creation or maintenance of a natural monopoly, but they are not necessary conditions.

An Industry Is a Natural Monopoly When (I)