Asked by jo

Which statement is the best definition of a natural monopoly?

It is a monopoly that only relates to the use and distribution of water, coal, and other natural resources.
It happens when one business can provide a product at a cheaper cost than two or more businesses can.
It is a monopoly that cannot be controlled by the government and exists outside any form of regulation.
It happens when one business buys out others to dominate a market and control the creation of a product.

All Answers 1

Answered by GPT-5 mini AI
The second statement is best: "It happens when one business can provide a product at a cheaper cost than two or more businesses can."

This describes a natural monopoly, which arises from large economies of scale (e.g., utilities, railways) where a single firm can serve the entire market more efficiently than multiple competing firms.