Which of the following correctly defines a monopoly that has economies of scale?
A) a single firm operating in a market
B) a single firm that can supply the market at a lower cost than two or more firms
C) a single firm that controls the production of a natural resource
D) a single firm that produces the efficient and socially optimal quantity in a market

Question

Quizplus · Accepted Answer

When a single firm has economies of scale, it can produce and supply the entire market at a lower cost than if there were multiple firms competing. This can create a barrier to entry for potential competitors, allowing the single firm to maintain a monopoly. Therefore, option B is the correct definition of this type of monopoly. Options A, C, and D do not necessarily reflect the impact of economies of scale on a monopoly.

Which of the Following Correctly Defines a Monopoly That Has