Natural monopolies have all of the following characteristics except
A) relatively high fixed cost
B) relatively low average variable cost
C) low levels of production
D) difficulty for new firms to enter
E) only one firm can produce profitably

Question

Quizplus · Accepted Answer

Natural monopolies typically have high levels of production to spread out their high fixed costs over many units, making the average cost per unit lower. This is contrary to choice C, which suggests low levels of production, not characteristic of natural monopolies.

Natural Monopolies Have All of the Following Characteristics Except