The situation in which one firm can produce the total output of the market at lower cost than several firms is called
A)natural monopoly.
B)pure monopoly.
C)ruling monopoly.
D)cost monopoly.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when the average cost of production of the entire market quantity needed by consumers is lower if a single firm produces the output rather than multiple firms. This can be due to economies of scale, where the firm can spread its fixed costs over a larger output, resulting in lower average costs. As a result, natural monopolies often arise in industries where significant infrastructure or initial investment is required, such as water, gas, or electricity utilities.

The Situation in Which One Firm Can Produce the Total