To Be a Natural Monopoly, a Firm Must

question 11

Multiple Choice

To be a natural monopoly, a firm must

• A)control a key resource input.
• B)have economies of scale that are so large that it can supply the entire market at a lower cost than two or more firms.
• C)have significant network externalities.
• D)be in a government-regulated market.

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Definitions:

Segmentation

The process of dividing a broader market into distinct subsets of consumers with common needs or characteristics.

Pepsi-Cola

A carbonated soft drink produced and manufactured by PepsiCo., characterized by its sweet flavor and known as one of Coca-Cola's main competitors.

Schema

A cognitive framework or concept that helps organize and interpret information in the mind, based on experience and prior knowledge.

Golden Triangle

A term for various globally recognized tripartite areas known for specific characteristics, such as being a hotspot for drug trafficking in Southeast Asia or a touristic route in India.