A natural monopoly exists when

A) unit costs are minimized by having one firm produce an industry's entire output.
B) several formerly competing producers merge to become the only firm in an industry.
C) short-run average total cost curves are tangent to long-run average total cost curves.
D) minimum efficient scale is attained at a small level of output.

Natural Monopoly

An industry in which economies of scale are so great that a single firm can produce the industry’s product at a lower average total cost than would be possible if more than one firm produced the product.

Unit Costs

The expense a business incurs to manufacture, warehouse, and distribute a single unit of a specific product or service.

Entire Output

The total amount of goods or services produced by a company, industry, or country within a specific period.