A monopoly is most likely to emerge and be sustained when

A) output demand is relatively elastic.
B) firms have U-shaped average-total-cost curves.
C) fixed capital costs are small relative to total costs.
D) economies of scale are large relative to market demand.

Economies of Scale

The cost advantage achieved by an enterprise when production becomes efficient, as costs can be spread over a larger amount of goods.

Market Demand

The total quantity of a good or service that all consumers are willing and able to purchase at various prices during a given period.