Which of the following best describes a 'natural monopoly'?

Q: How do I try a free CIE Economics question?

Just tap any of the four options on this page — no signup, no card, nothing to install. You'll see the correct answer and a full mark-scheme-style explanation within a second. Each visit shows a fresh randomly-picked question from the live CIE IGCSE Economics bank, so you can keep refreshing to try different ones before deciding whether to create a free account for daily access.

Q: Is Kramizo really free for CIE Economics students?

Yes — completely free. Every student gets 45 questions a day on the free plan, across any board and any subject, with no card required and no trial countdown. Kramizo's optional Pro plan removes the daily cap and adds analytics, but the free plan is genuinely free forever. We make money from the small percentage of students who choose to upgrade — not from selling data or ads.

Q: Are the Economics questions aligned to the CIE IGCSE syllabus?

Every question is written against the published CIE IGCSE Economics syllabus and reviewed for accuracy before being added to the bank. We match the command words (state, describe, explain, evaluate), mark allocations, and difficulty tier you'll see on real CIE past papers. Explanations are written in the style of official examiner mark schemes so students learn exactly what marks are being awarded for.

Question

Which of the following best describes a 'natural monopoly'?

Accepted Answer

An industry where average costs fall continuously as output increases — Award 1 mark for identifying that a natural monopoly exists where average costs fall continuously as output increases, making it most efficient for one firm to supply the entire market (e.g., water supply, electricity distribution). A is incorrect — this describes market dominance through competition. C is incorrect — this describes a legal monopoly. D is incorrect — this describes perfect competition.

Answer

An industry where average costs fall continuously as output increases

Answer

A market with many firms producing identical products

Answer

A firm that has been granted monopoly rights by the government

Answer

A market where one firm dominates due to aggressive marketing

One real Economics question.No signup. 30 seconds.

One real Economics question.
No signup. 30 seconds.