Chapter 77, Problem 6MCQ

To determine

The feature of a natural monopoly unlike other monopolies

Answer to Problem 6MCQ

From the available options, the correct option is fixed cost.

Explanation of Solution

A natural monopoly considers a characteristic of fixed cost that is not involved in any other type of monopoly as it involves high infrastructural or start-up cost which is fixed. A price is single in simple monopoly, and marginal cost and variable cost are the features that can also be considered in other categories of monopolies.

Therefore, the correct option is c (fixed cost).

Economics Concept Introduction

Introduction: A monopoly that involves high start-up costs and barriers to entry and provides the largest supplier in any industry is called a natural monopoly because it covers powerful economies of scale to conduct the business. A person who has a monopoly on the business is called a monopolist.