Which statement is false?
A)Once a monopoly is set up,it is possible to dislodge it.
B)Some monopolists have control over an essential resource.
C)Several competing firms can provide cheaper service than a natural monopoly.
D)As a firm grows larger,at first it realizes economies of scale,but eventually diseconomies of scale set in.

Question

Quizplus · Accepted Answer

Statement C is false because a natural monopoly occurs when a single firm can supply a good or service to an entire market at a lower cost than could two or more firms. This means that, contrary to the statement, several competing firms would not be able to provide cheaper service than a natural monopoly due to the efficiencies and cost savings that arise from economies of scale inherent in a natural monopoly.

Which Statement Is False