CAIE A-Level Economics A2 7.6.1 Market Structures Questions

Practise identifying natural-monopoly features, barriers and economies of scale and classifying monopoly, oligopoly and competition in A2 questions.

Exam points

Identify monopoly and natural-monopoly characteristics and classify changes in market structure.

[Maximum number: 1]

Which statement is correct for a firm classed as a natural monopoly?

It will always operate in the public sector and earn normal profits.

It will have high barriers to entry and be the dominant producer.

It will easily benefit from external economies of scale.

It will have higher average costs than a monopolistically competitive firm.

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