select the correct answer.\nwhen does a natural monopoly arise?\na. when a single seller buys or takes over…

select the correct answer.\nwhen does a natural monopoly arise?\na. when a single seller buys or takes over all the competitors in the market\nb. when multiple sellers have access to scarce natural resources in a region\nc. when economies of scale occur over a relevant range of output\nd. when a limited number of sellers decide to jointly sell their products

select the correct answer.\nwhen does a natural monopoly arise?\na. when a single seller buys or takes over all the competitors in the market\nb. when multiple sellers have access to scarce natural resources in a region\nc. when economies of scale occur over a relevant range of output\nd. when a limited number of sellers decide to jointly sell their products

Answer

Brief Explanations:

A natural monopoly occurs when long - run average total costs decline over a relevant range of output due to economies of scale. This makes it more efficient for one firm to produce the entire industry output. Option A describes a merger or acquisition to create a monopoly, not a natural monopoly. Option B is about multiple sellers with access to resources, not a natural monopoly situation. Option D is about collusion among sellers, not a natural monopoly.

Answer:

C. when economies of scale occur over a relevant range of output