a. always cost effective for government-owned firms to produce the product.
b. never cost effective for one firm to produce the product.
c. always cost effective for two or more private firms to produce the product.
d. never cost effective for two or more private firms to produce the product.
When a natural monopoly exists, it is?
This is a definitional question. D is the answer.
A "natural monopoly" exists when a single firm can produce a given good or service more cost-efficiently than two or more firms.
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