Which of the following is an example of a local natural monopoly?
A) One of the two gas stations in town
B) The only movie theater in town
C) The U.S.Postal Service
D) The three grocery stores in the state
E) The two malls in town

Question

Quizplus · Accepted Answer

A local natural monopoly occurs when a single firm can dominate the market due to high fixed costs and difficulty in entry for competitors. In this case, the only movie theater in town fits this description as it likely has high fixed costs and may be difficult for new theaters to enter the market. The other options either have multiple competitors or aren't necessarily natural monopolies.

Which of the Following Is an Example of a Local