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.
Answer
A
It is a monopoly that only relates to the use and distribution of water, coal, and other natural resources.
B
It happens when one business can provide a product at a cheaper cost than two or more businesses can.
C
It is a monopoly that cannot be controlled by the government and exists outside any form of regulation.
D
It happens when one business buys out others to dominate a market and control the creation of a product.
Explanation
A natural monopoly occurs when one firm can serve the whole market at a lower cost than multiple competing firms, often because the industry has high fixed costs. Choice B describes this cost advantage. It is not limited to natural resources, and it can still be regulated by the government.
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