Day: June 12, 2025

Accounting Multiple Choice Question – 12 June 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Olya Kobruseva on Pexels.com

If the market for a particular product is a natural monopoly, then production of the product must be associated with?

Select ONE answer:

  1. High marginal costs
  2. Low marginal costs
  3. Economies of scope acting as a barrier to entry
  4. Low fixed costs

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

  1. Not correct
  2. Correct == > With a natural monopoly, fixed costs will be high, marginal costs will be low, and economies of scale (rather than scope) provide an effective barrier to entry.
  3. Not correct
  4. Not correct

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.