A firm that has economies of scale:
A) at low output and but diseconomies of scale at high output is a natural monopoly.
B) over the entire range of output demanded is a natural monopoly.
C) at any particular level of output is a natural monopoly.
D) has a continually rising long-run average cost curve.

Question

Quizplus · Accepted Answer

A firm that experiences economies of scale over the entire range of output demanded can produce at a lower average cost than any potential competitor, making it a natural monopoly.

A Firm That Has Economies of Scale