Question

In the rural farming town of York Springs, Smith's was the only grocery store and Lehman'd was the only animal feed mill. How would you describe these businesses?
A) Active competitors
B) Competitive companies
C) Natural monopolies
D) Price-controlling oligopolies

Answer 1

The best and most correct answer among the choices provided by the question is the third choice "natural monopolies"

Natural monopolies arise where the largest supplier in an industry, often the first supplier in a market, has an overwhelming cost advantage over other actual or potential competitors; this tends to be the case in industries where fixed costs predominate.

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