A _______ exists when the quantity demanded in the market is less than the quantity at the bottom of the long-run average cost curve.
A) natural monopoly
B) monopoly
C) oligopoly
D) monopolistic competition

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can supply a product or service to an entire market at a lower cost than what it would be if there were multiple firms operating in the market, often due to economies of scale. This situation typically results in a condition where the quantity demanded is less than the quantity at the minimum point of the long-run average cost curve, making it inefficient for new entrants to compete.

A _______ Exists When the Quantity Demanded in the Market