What is a "natural" monopoly?
A) One that occurs without any business firm trying to achieve it-that is, it just happens because the business does things right.
B) A situation where one company can most efficiently supply all the product or service that is needed by consumers
C) One where government finds it "natural" to grant monopoly powers to certain business firms.
D) One that occurs when a business firm sets out to achieve a monopoly and no other firm tries to stop it.
E) There is no such thing as a natural monopoly.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when one company can most efficiently supply all the product or service that is needed by consumers. This can happen due to economies of scale, where the cost per unit decreases as the company produces more units. It is not necessarily something that just happens by chance or is granted by the government.

What Is a "Natural" Monopoly