Network industries most often generate:
A)perfectly competitive markets.
B)negative externalities.
C)product differentiation.
D)natural monopolies.
E)none of the above.

Question

Quizplus · Accepted Answer

Network industries, such as utilities and telecommunications, often have high fixed costs and economies of scale, which can create natural monopolies where one firm can produce at a lower cost than multiple firms. This makes competition difficult, leading to the development of monopolies or oligopolies. Therefore, D (natural monopolies) is the most appropriate choice.

Network Industries Most Often Generate