A natural monopoly exists when one large firm can produce a product at a lower per unit cost than can smaller firms.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when one firm can produce goods and services at a lower cost than any potential competitor due to high barriers to entry, economies of scale, or ownership of a key resource. This results in the firm having a significant competitive advantage, which may lead to higher profits and market power.

A Natural Monopoly Exists When One Large Firm Can Produce