Question

If economies of scale are so pronounced in an industry that only one firm can survive in the industry, this firm is called a(n) __________ monopoly.

Answer 1

The answer is a natural monopoly

Step-by-step explanation:

A natural monopoly is one of the forms monopoly that exists due to the high capital needed or powerful economies of scale of conducting a business in a specific industry. A natural monopoly will naturally have very high fixed costs, meaning that it is almost impossible to have more than one firm producing the good.

A firm that is blessed with a natural monopoly might be the only provider of a product or service in an industry or geographic location. Example of natural monopoly is the electricity grid.