When Demand and Cost Conditions Are Such That Only One

Multiple Choice

When demand and cost conditions are such that only one firm can exist in an industry:

A) government must enact regulations to protect consumers and ensure competition.
B) production costs could be decreased if government were to divide the single firm into several smaller firms.
C) efficiency will be increased by dividing the single firm into several smaller firms.
D) a natural monopoly is said to exist.