Respuesta :
Answer: the correct answer is B. (i) and (iii) only
Explanation:
A natural monopoly is a monopoly in an industry in which huge infrastructural costs and other fences to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming advantage over potential competitors.
(i) multiple firms would likely each have to pay large fixed costs to develop their own network of pipes. This is true but often times it is just one big company the one that serves the whole market or a partnership of two or (rarely) three companies that works as a big company.
(iii) a single firm can serve the market at the lowest possible average total cost. This is true because a natural monopoly has scale economies that's why it can offer the lowest possible average total costs.
If the distribution of water is a natural monopoly, then: B. (i) and (iii) only.
A monopoly can be defined as a market structure that is typically characterized by a single seller, who sells a unique product in a market by virtue of dominance. Thus, it is a market structure wherein the seller has no competitor because he or she is solely responsible for the sale of unique products without any close substitute.
On a related note, a natural monopoly occurs when a business firm can produce the total output required in a particular market at lower cost than a combination of two or more business firms.
In this context, if the distribution of water is a natural monopoly, then:
- Each of the multiple firms are more likely to pay large fixed costs in order to develop their own network of pipes.
- A single firm can serve the market at the lowest or least possible average total cost (AVC).
Read more: https://brainly.com/question/9305223
