A natural oligopoly can form
A) if there are economies of scale.
B) only if firms sell a differentiated good.
C) only if firms sell a homogeneous good.
D) if there is only one firm in the industry.

Question

Quizplus · Accepted Answer

Economies of scale can lead to a natural oligopoly because they allow a few firms to dominate the market by producing at lower costs, making it difficult for new entrants to compete.

A Natural Oligopoly Can Form