A Natural Monopoly Is Most Likely to Occur in Which

Multiple Choice

A natural monopoly is most likely to occur in which of the following industries?

A) the pharmaceutical industry because the development and approval of new drugs through the Food and Drug Administration can take more than 10 years
B) the diamond mining and marketing industry because one firm can control a key resource
C) the software industry because of the importance of network externalities
D) an industry where fixed costs are very large relative to variable costs