Question

A natural monopoly is a desirable market structure because:____.

A. It allows the producer to earn greater profit than is possible under competition.
B. It allows the producer to deliver a higher-quality product to the market.
C. It allows the producer to deliver products to the market at the lowest possible cost.
D. The jobs it creates pay higher wages than those in a competitive industry.

Answer 1

C. It allows the producer to deliver products to the market at the lowest possible cost.

Step-by-step explanation:

A natural monopoly by definition is the one where one firm can produce the product at lowest cost than two or more competetive market and due to low cost production can alone serve the whole market creating a monopoly in a natural way.

Because they have such a high fixed cost that new entrants are not east to enter and makes it impractical for other firms to produce a good at such cost.

Examples are gas network or electricity grid.