A firm whose average total cost continually declines at least to the quantity that could supply the entire market is known as a natural monopoly.
Natural monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market gives the largest supplier in an industry, often the first supplier in a market, an overwhelming advantage over potential competitors.
Why is the answer of the question natural monopoly?
There is one hint that the firm will able to supply the entire market, so it will be one of the characteristic of natural monopoly. The firm also able to reduce the total cost where usually the cost of this firm's business is quite high so not many firm will able to compete.
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