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A natural monopoly is one in which the good can be provided at the lowest cost if the market is run by a monopoly, due to some natural feature of the good itself.

Which of the following are typical properties of markets that are natural monopolies?

Select ALL that apply.


Very high costs of entry into the market.


Restricted to being a monopoly by the government, or a market consisting of a single firm owned by the government.


Very low marginal costs, or marginal costs that decline with quantity.


Large economies of scale.


The market is for natural goods, such as wheat.


Generated because one firm owns all the sources of an input necessary to make the good.


Production of inefficiently low quantities.

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