Question

select the correct answer. when does a natural monopoly arise? a. when a single seller buys or takes over all the competitors in the market b. when multiple sellers have access to scarce natural resources in a region c. when economies of scale occur over a relevant range of output d. when a limited number of sellers decide to jointly sell their products

Explanation:

A natural monopoly occurs when economies of scale are so large that one firm can produce the entire output of the market at a lower average total cost than could multiple firms. This is because as output increases, the average cost per unit decreases over a relevant range of output. Option A is more of a regular monopoly through acquisition. Option B would likely lead to competition rather than a monopoly. Option D is more of a cartel - like situation rather than a natural monopoly.

Answer:

C. when economies of scale occur over a relevant range of output