When economies of scale are so large that the minimum efficient scale of operation is roughly equal to market demand, _____ exists.
A) monopolistic competition
B) a monopsony
C) an oligopoly
D) a natural monopoly

Question

Quizplus · Accepted Answer

A natural monopoly occurs when economies of scale are so large that a single firm can supply the entire market at a lower cost than could multiple firms, making the minimum efficient scale of operation roughly equal to the market demand.

When Economies of Scale Are So Large That the Minimum