When a single business can service the entire market demand at a lower cost than several smaller businesses, the market is
A)an oligopoly.
B)a marginal monopoly.
C)a rational rule monopoly.
D)a natural monopoly.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single large firm can produce and distribute goods or services to satisfy the entire market demand at a lower cost than several smaller firms. This can occur due to economies of scale, where the cost per unit decreases as production increases. Therefore, a natural monopoly is the best choice for the given scenario.

When a Single Business Can Service the Entire Market Demand