Think of the firms and industries that are familiar to you-how many firms in the industry, what their cost structures may look like-and decide which among them is least likely to be a natural monopoly.
A) a professional football franchise in Toledo, Ohio
B) a pharmaceutical firm that produces a life-saving drug after 10 years of research investment
C) a public utilities firm, such as an electric power company
D) a high school in a small rural Kentucky town
E) an alternative rock band

Question

Quizplus · Accepted Answer

An alternative rock band is least likely to be a natural monopoly because the music industry typically has low barriers to entry, and there are many bands and artists competing for listeners. Unlike utilities or pharmaceuticals, the cost structure does not favor a single producer dominating the market.

Think of the Firms and Industries That Are Familiar to You-How