Which of the following is the best example of a natural monopoly?
A) ownership of the only ferry across Puget Sound for twenty miles
B) the United States Postal Service
C) the cable television company in your hometown
D) owning the only licensed taxicab in town
E) producing a patented drug

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can supply the entire market at a lower cost than any combination of two or more firms. Cable television companies often have high infrastructure costs and economies of scale, making them a natural monopoly in many areas.

Which of the Following Is the Best Example of a Natural