Economics 9708 · AS & A Level · 7.6

7.6 — practice question

Which statement is true of a firm that is classified as a natural monopoly?

  • AIt will always operate in the public sector and earn normal profits.
  • BIt will have high barriers to entry and be the dominant producer.
  • CIt will easily benefit from external economies of scale.
  • DIt will have higher average costs than a monopolistically competitive firm.

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