Natural Monopoly in Economics: Definition & Examples


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All of the following situations could lead to a natural monopoly EXCEPT:

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1. If a large amount of existent infrastructure is required to run a particular kind of business, we would expect all of the following effects EXCEPT:

2. _____ is NOT an example of a natural monopoly.

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About This Quiz & Worksheet

The questions on the quiz will ask you to define key terms related to the concept of natural monopolies. You will also be tested on examples of the concept and the different factors affecting the creation of businesses.

Quiz & Worksheet Goals

You will review the following:

  • When a natural monopoly may exist
  • Barriers of entry for a business
  • Examples of natural monopolies
  • Definition of a natural monopoly
  • Advantages of such monopolies

Skills Practiced

  • Interpreting information - verify you can read information regarding when a natural monopoly may exist and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about the barriers of entry for a business
  • Reading comprehension - ensure that you draw the most important information from the related natural monopolies lesson

Additional Learning

There is much more to learn about natural monopolies. You should read the lesson called Natural Monopoly in Economics: Definition & Examples for more information. This lesson will help you:

  • Understand what a natural monopoly is
  • Describe the particular barriers to entry a new business would face
  • Identify some types of businesses that would be difficult to reproduce
  • Explain how railroads and power plants can be natural monopolies
  • Appreciate the efficiency of natural monopolies