What is a natural monopoly characterized by?
A) economies of scale over the relevant range of demand
B) economic losses at all output levels in an industry with production by a single seller
C) crucial patents being held by a single firm in an industry
D) diseconomies of scale over the relevant range of demand

Question

Quizplus · Accepted Answer

A natural monopoly is characterized by economies of scale over the relevant range of demand. This means that it is more efficient for a single firm to produce and distribute the goods or services in an industry than for multiple firms to do so. As production increases, the average cost per unit decreases, allowing the single firm to offer lower prices and attract more customers.

What Is a Natural Monopoly Characterized By