A natural monopoly is defined as an industry in which ______.
a. one firm can produce the entire industry output at a lower average cost than can two or more firms
b. a single firm controls crucial inputs to the production process
c. one firm is especially large relative to other firms that could enter the industry
d. a single seller exists as a result of patent protection
Ans: a. one firm can produce the entire industry output at a lower average cost than can two or more firms
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Refer to the scenario above. If you invest your money in the bank, you will receive ________ on maturity
A) $172,304.74 B) $898,797.66 C) $3,521,725.58 D) $4,020,025.01
Refer to the figure above. If the average cost faced by the monopolist when it produces and sells the optimal output is $4, ________
A) it makes a loss of $60 B) it makes a loss of $120 C) it makes a profit of $60 D) it makes a profit of $90