Natural Monopoly e an industry is a natural monopoly when a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms A natural monopoly arises when there are economies of scale over the relevant range of outputNatural Monopoly • An industry is a natural monopoly when a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms. • A natural monopoly arises when there are economies of scale over the relevant range of output