If economies of scale in an industry are so extensive that a single firm could serve the entire market at a lower cost than if the market was split between two or more firms, this industry is called a(n)
A)conglomerate
B)natural monopoly.
C)oligopoly.
D)restraint of trade.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can supply a good or service to an entire market at a lower cost than could two or more firms, due to economies of scale. This is often seen in industries where the initial investment and fixed costs are so high that it is impractical for multiple firms to compete.

If Economies of Scale in an Industry Are So Extensive