The situation in which one firm can produce the total output of the market at 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 situation where one firm can produce the total output of the market at a lower cost than several firms is called a natural monopoly. This can occur due to economies of scale or high fixed costs of production. A pure monopoly refers to a situation where there is only one seller in the market and no close substitutes for the product. Ruling monopoly and cost monopoly are not commonly used terms in economics.

The Situation in Which One Firm Can Produce the Total