Under what circumstances would having multiple firms in a market result in higher prices for all customers?
A)Perfect competition
B)Natural monopoly
C)Price Discrimination
D)Patented products

Question

Quizplus · Accepted Answer

In a natural monopoly situation, there are high fixed costs and it is inefficient for multiple firms to compete in producing the same good or service. Therefore, only one firm can operate at a lower cost and produce more efficiently than multiple firms. As a result, this single firm has a monopoly, allowing it to charge higher prices to customers.

Under What Circumstances Would Having Multiple Firms in a Market