A market structure in which only one firm survives because of economies of scale:
A) is called a structural monopoly.
B) is called a patented monopoly.
C) is called a natural monopoly.
D) is called a government monopoly.

Question

Quizplus · Accepted Answer

In a natural monopoly, a single firm can efficiently produce the entire output for the market due to economies of scale. This means that having more than one firm would result in a waste of resources, leading to higher costs and inefficiencies. Therefore, a natural monopoly typically arises in industries such as utilities or transportation, where the fixed costs of production are very high relative to the variable costs. Options A, B, and D are not correct because they do not accurately describe the specific conditions that create a natural monopoly.

A Market Structure in Which Only One Firm Survives Because