A Natural Monopoly Exists When

question 195

Multiple Choice

A natural monopoly exists when

• A) control of a key input leads to a single-firm industry.
• B) increasing marginal returns and the ability to obtain quantity discounts from suppliers leads to a single-firm industry.
• C) economies of large-scale production are substantial, leading to a single-firm industry.
• D) the government restricts entry that leads to a single-firm industry.