The situation where a single firm can supply the product to an entire market at a lower unit cost than if the market were split among a number of competing firms, is called a
A) dominant firm oligopoly.
B) structured market.
C) natural monopoly.
D) trust.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when the economies of scale of production are so significant that a single firm can produce and supply the entire market at a lower unit cost than if multiple firms were competing. This can result in barriers to entry for potential competitors, ultimately leading to a market dominated by a single firm.

The Situation Where a Single Firm Can Supply the Product