Which of the following would most likely be classified as a natural monopoly?
A) A city water district
B) Microsoft
C) Disneyland
D) Exxon-Mobil

Question

Quizplus · Accepted Answer

A city water district is a natural monopoly because the fixed costs of providing water to the entire city are so high that it would not make sense for multiple companies to compete for customers. Therefore, the city water district has control over the market and can charge higher prices without fear of competition.

Which of the Following Would Most Likely Be Classified as a Natural