Question

A natural monopoly occurs when the quantity demanded is _____________ the minimum quantity it takes to be at the bottom of the long-run average cost curve.

Answer 1

Answer:

Less than.

Explanation:

As the exercise details, a natural monopoly occurs when the quantity demanded is less than the minimum quantity it takes to enter that industry.

It occurs when, in a high infrastructural industry, the cost to entry is relative to the size of the market that the largest supplier has. Therefore, said supplier has a natural monopoly given the huge advantage over potential competitors.