The situation in which one firm can produce the total output of the market at a lower cost than several firms is called a
A) natural monopoly.
B) pure monopoly.
C) ruling monopoly.
D) cost monopoly.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when one firm can produce the total output of the market at a lower cost than multiple firms due to economies of scale. This often occurs in industries with high fixed costs and low marginal costs, such as utilities or transportation. A pure monopoly involves a single firm controlling the entire market, regardless of cost advantages, and a ruling monopoly involves a firm dominating the market through anti-competitive behavior or government intervention. A cost monopoly is not a commonly used term in economics.

The Situation in Which One Firm Can Produce the Total