A natural monopoly exists when a single company can fill the needs of all customers in a specific area.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when the nature of the industry makes it most efficient to have only one supplier who can provide the product or service at a lower cost than any potential competitors. This is often seen in industries that require large amounts of expensive infrastructure, such as utilities or transportation. As a result, it is more practical for one company to serve the entire market rather than multiple companies duplicating infrastructure and driving up costs for consumers.

A Natural Monopoly Exists When a Single Company Can Fill