Which of the following would probably not be considered a natural monopoly?
A)a municipal water company
B)the local telephone industry
C)the cable television industry
D)natural gas and electric companies
E)the automobile industry

Question

Quizplus · Accepted Answer

The automobile industry does not exhibit the characteristics of a natural monopoly, which typically arise when it is more efficient for a single firm to produce the entire output of the market due to economies of scale, high fixed costs, and high barriers to entry. The other industries listed (municipal water, local telephone, cable television, natural gas, and electric) are more likely to be considered natural monopolies.

Which of the Following Would Probably Not Be Considered a Natural