If a firm can double inputs and, thereby, more than double output over the range of output the market demands, it is a
A)natural monopoly
B)local monopoly
C)price discrimination monopoly
D)monopsony
E)candidate for antitrust prosecution

Question

Quizplus · Accepted Answer

If a firm can double inputs and more than double output over the range of output the market demands, it suggests that the firm has a significant cost advantage over any potential competitor. This cost advantage can make it difficult or even impossible for any other firm to enter the market and compete with the existing firm, making it a natural monopoly.

If a Firm Can Double Inputs And, Thereby, More Than