Natural monopolies differ from other forms of monopoly because they:
A)are generally not worried about competition eroding their monopoly position in the market
B)are not subject to barriers to entry
C)are not regulated by government
D)generally don't make a profit

Question

Quizplus · Accepted Answer

Natural monopolies are unique because they arise due to economies of scale, where one firm can supply the entire market at a lower cost than multiple firms competing against each other. Due to this advantage, natural monopolies are generally not worried about competition eroding their monopoly position in the market, making choice A the correct answer. B is incorrect because natural monopolies are subject to barriers to entry, such as high startup costs, while C is incorrect because natural monopolies tend to be regulated by the government. D is incorrect because while natural monopolies may not face much competition, they still make a profit.

Natural Monopolies Differ from Other Forms of Monopoly Because They