Question: A natural monopoly arises when: Question 7 Answer a . The government grants the firm exclusive rights. b . The firm's technology exhibits economies of

A natural monopoly arises when:
Question 7Answer
a.
The government grants the firm exclusive rights.
b.
The firm's technology exhibits economies of scale large enough to supply the whole market at a lower average total production cost than is possible with more than one firm.
c.
The firm controls a key resource.
d.
The firm has significant barriers to entry.

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