Answer:
C. there are economies of scale over the relevant range of output.
Explanation:
An industry is a natural monopoly when a single company can deliver a good or service to an entire market at less than two or more companies. A natural monopoly arises when there are economies of scale for the entire relevant range of production.
An example of a natural monopoly is in water distribution. To bring water to city dwellers, a company needs to build a pipeline network. If two or more companies competed to provide this service, each company would have to pay a fixed cost of building the network. Thus, the average total cost of water is lower if only one company supplies the market, which represents an economy of scale.
