A Natural Monopoly

question 216

Multiple Choice

A natural monopoly

• A) has one lowest-cost producer in the industry.
• B) exists only when it is regulated.
• C) has long-run average costs equal to zero.
• D) always experiences diseconomies of scale.

---

Definitions:

Operations

The day-to-day activities involved in the running of a business, organization, or system, focusing on efficiently producing goods and services.

Antitrust Risks

The risks associated with violating laws designed to promote competition and prevent monopolies.

Vertical Integration

The combination of two or more stages of production or distribution managed by a single company to increase control and reduce costs along the supply chain.

Horizontal Integration

A business growth strategy through acquiring or merging with competitors in the same industry at the same stage of production.