A natural monopoly is a market where
A) a single firm has control over a vital natural resource.
B) many smaller firms can produce the entire market output at the same per-unit cost as could one large firm.
C) a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms.
D) many smaller firms can produce the entire market output at a lower per-unit cost than could one large firm.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can supply the entire market demand at a lower cost than any combination of smaller firms, due to economies of scale.

A Natural Monopoly Is a Market Where