When a single firm can supply a product to an entire market at a lower cost than could two or more firms, the industry is called a
A)resource industry.
B)exclusive industry.
C)government monopoly.
D)natural monopoly.

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can supply a product to an entire market at a lower cost than could two or more firms, due to factors such as economies of scale, network effects or control over essential resources. In such a scenario, if multiple firms were to compete, duplication of infrastructure, equipment, and other resources would result in higher production costs which would be passed on to consumers in the form of higher prices. Therefore, to protect consumers, natural monopolies are often regulated by the government.

When a Single Firm Can Supply a Product to an Entire