The most important feature of a natural monopoly is:
A)constant returns to scale over the relevant range of output
B)it exploits a natural resource
C)diseconomies of scale over the relevant range of output
D)economies of scale over the relevant range of output

Question

Quizplus · Accepted Answer

The most important feature of a natural monopoly is economies of scale over the relevant range of output, which means that the firm can produce its goods or services at a lower cost than any potential competitor. This creates a barrier to entry for new firms and allows the existing firm to maintain a monopolistic position in the market.

The Most Important Feature of a Natural Monopoly Is