Natural monopolies are closely associated with
A) high-demand products.
B) low elasticities of demand.
C) market disequilibrium.
D) economies of scale.

Question

Quizplus · Accepted Answer

Natural monopolies occur in industries where the cost of production is lowest when only one firm provides the output. This is often due to significant economies of scale, where the average costs of production decrease as the firm's size increases.

Natural Monopolies Are Closely Associated with