A Natural Monopoly Exists When, Throughout the Range of Market

question 90

Multiple Choice

A natural monopoly exists when, throughout the range of market demand,

• A)average cost is increasing
• B)there are diseconomies of scale
• C)average cost is decreasing
• D)average cost is constant
• E)marginal cost exceeds average cost

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Definitions:

GDP Deflator

An economic metric that converts the nominal Gross Domestic Product into Real GDP by adjusting for price level changes, representing the price inflation or deflation within an economy.

Inflation Rate

The annual rate at which the cost of goods and services in an economy rises, representing a general upward trend in prices over time.

Markets for Factors

Places where factors of production (such as labor, capital, and land) are bought and sold, affecting their prices and allocation.

Markets for Goods

Places or platforms where goods and physical products are bought and sold, ranging from physical marketplaces to online stores.