If the efficient scale of production only allows three firms to supply a market,the market is a
A)three-firm monopoly.
B)cost-based oligopoly.
C)natural oligopoly.
D)monopolistic competition.
E)competitive monopoly.

Question

Quizplus · Accepted Answer

A natural oligopoly occurs when the efficient scale of production only allows a few firms to supply the market. Therefore, out of the given choices, a natural oligopoly is the most appropriate answer.

If the Efficient Scale of Production Only Allows Three Firms