When a natural monopoly exists,how cost effective is it to produce the product
A)It is generally cost effective for government-owned firms to produce the product.
B)It is generally not cost effective for one firm to produce the product.
C)It is generally cost effective for two or more private firms to produce the product.
D)It is generally not cost effective for two or more private firms to produce the product.

Question

Quizplus · Accepted Answer

In a natural monopoly, a single firm can supply the entire market at a lower cost than any combination of two or more firms due to economies of scale.

When a Natural Monopoly Exists,how Cost Effective Is It to Produce