Asked by
Carson Hatch
on Dec 12, 2024Verified
A natural monopoly is a market where
A) a single firm has control over a vital natural resource.
B) many smaller firms can produce the entire market output at the same per-unit cost as could one large firm.
C) a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms.
D) many smaller firms can produce the entire market output at a lower per-unit cost than could one large firm.
Natural Monopoly
A market situation where a single supplier is most efficient in providing goods or services due to the high fixed or startup costs relative to the size of the market.
Per-unit Cost
The cost associated with producing a single unit of a product, including all variable and fixed costs divided by the total output.
Market Output
The total quantity of goods or services produced and offered for sale by firms in a particular market.
- Attain an understanding of the distinctive qualities of a natural monopoly.
Verified Answer
UI
Learning Objectives
- Attain an understanding of the distinctive qualities of a natural monopoly.