A type of firm that usually has a natural monopoly in most of its markets is a(n):
A) electric utility.
B) major automobile producer.
C) major retail establishment.
D) commercial airline.

Question

Quizplus · Accepted Answer

Electric utilities often have a natural monopoly in their markets because the costs of producing and distributing electricity are high and it is not efficient for multiple firms to duplicate infrastructure. This means that one firm can provide service at a lower cost than any potential competitors, and therefore has a monopoly on the market. Major automobile producers, major retail establishments, and commercial airlines can face competition from other firms and do not have a natural monopoly in most markets.

A Type of Firm That Usually Has a Natural Monopoly