C. Many firms can produce at the same minimum cost
D. A single firm can supply the entire market at lower cost than two or more firms because of large fixed costs and declining average costs
Answer: Option D
Solution (By JKSSB Mock Tests)
A natural monopoly exists when subadditive costs (typically due to large fixed costs and declining average costs) make it more efficient for a single firm to serve the entire market.
Explanation:
Public sector enterprises in India have historically pursued a combination of commercial viability and broader social and strategic objectives.
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