Question

For a natural monopoly to exist

A. a​ firm's long run average cost curve must exhibit economies of scale throughout the relevant range of market demand.
B. a​ firm's long run average cost curve must exhibit diseconomies of scale beyond the economically efficient output level.
C. a firm must continually buy up its rivals.
D. a firm must have a governmentminus−imposed barrier.

Answer 1

The correct answer is A

Step-by-step explanation:

Natural monopoly is the kind of monopoly which exists because of the high start up costs as well as the powerful economies of scale for conducting or performing a business in a particular industry.

And for this type of monopoly to exist , a firm or business need that the long run average cost curve will exhibit the economies of scale by the relevant range of the market demand.