Which of the following is correct about natural monopoly?
a. Natural monopoly exists when a firm has an upward-sloping long-run average cost curve.
b. A natural monopoly arises if a particular firm is able to sell each unit of its output at a different price.
c. A natural monopoly arises when a single firm has a cost advantage over smaller potential entrants.
d. A natural monopoly is created by government patents, licenses, and legal barriers to entry.
c
You might also like to view...
If firms in a monopolistically competitive market are earning economic profits, which of the following scenarios best reflects the change a representative firm experiences as the market adjusts to its long-run equilibrium?
A) Demand decreases and becomes less elastic. B) Demand decreases and becomes more elastic. C) Demand increases and becomes less elastic. D) Demand increases and becomes more elastic.
Fred purchases a bond, newly issued by the Big Time Corporation, for $10,000. The bond pays $400 to its holder at the end of the first, second, and third years and pays $10,400 upon its maturity at the end of four years. The principal amount of this bond is ________, the coupon rate is ________, and the term of this bond is ________.
A. $10,000; 4%; four years B. $10,000; $400; 4% C. $400; 40%; four years D. $10,400; 4%; four years