If economies of scale in an industry are so extensive that a single firm could serve the entire market at a lower cost than if the market was split between two or more firms, this industry is called a(n)
A) conglomerate
B) natural monopoly.
C) oligopoly.
D) restraint of trade.

Question

Quizplus · Accepted Answer

A natural monopoly is a situation where economies of scale are so extensive that a single firm can provide the goods or services to the entire market at a lower cost than any potential competitor. This creates a market with only one dominant firm, making it a monopoly.

If Economies of Scale in an Industry Are So Extensive