When the market for a good is a natural monopoly, this results in
A)improved product choice for consumers.
B)many producers charging low prices for the good.
C)dominance by a single producer of the good.
D)increased entry by new producers of the good.

Question

​When the market for a good is a natural monopoly, this results in
A)​improved product choice for consumers.
B)​many producers charging low prices for the good.
C)​dominance by a single producer of the good.
D)​increased entry by new producers of the good.

Quizplus · Accepted Answer

A natural monopoly occurs when the cost of production is so high that it is most efficient for a single producer to meet the demand for the entire market. As a result, there is only one dominant producer of the good, resulting in a lack of competition, higher prices, and potentially reduced product quality. Therefore, the correct answer is C, dominance by a single producer of the good.

​When the Market for a Good Is a Natural Monopoly

When the Market for a Good Is a Natural Monopoly