A market in which a single firm can produce,at a lower cost than multiple firms,the entire quantity of output demanded is called:

Question

Quizplus · Accepted Answer

A natural monopoly occurs when the economies of scale are so strong that one firm can meet the entire demand of the market at a lower cost than two or more firms could. This is typically the case in industries that require large fixed costs or infrastructure, such as utilities or transportation networks. In such cases, it may be more efficient to have a single provider rather than multiple competitors.

A Market in Which a Single Firm Can Produce,at a Lower