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Generate QuizA 'Natural Monopoly' arises when high fixed costs and significant economies of scale make it most efficient for a single firm to supply the entire market.
- True
- False
Answer: True
Industries like water supply, electricity grids, and railways are natural monopolies because duplicating the massive infrastructure network for multiple competing firms would be wildly inefficient and costly. Therefore, they are typically either state-owned or heavily regulated by the government.