A local electric utility company is a good example of a firm possessing "natural monopoly" characteristics.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when it is economically efficient for a single firm to supply the entire market, due to high fixed costs and barriers to entry. A local electric utility company often fits this description, as it may be the only firm capable of providing electricity to a given geographic area.

A Local Electric Utility Company Is a Good Example of a Firm