To Be a Natural Monopoly a Firm Must

question 63

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 very large relative to the total market.

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Definitions:

Multiproduct Branding

A branding strategy in which a company uses one name for all its products in a product class.

Multibranding

A branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment.

Private Branding

A branding strategy used when a company manufactures products but sells them under the brand name of a wholesaler or retailer. Also called private labeling or reseller branding.

Mixed Branding

A branding strategy where a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market.