Which of the Following Is Likely to Take Place If

question 5

Multiple Choice

Which of the following is likely to take place if regulators split a natural monopoly into two smaller firms?

• A) The number of firms in the market will increase but the market price will be unchanged.
• B) The output in the industry will increase.
• C) The cost of production in the industry will increase.
• D) The market demand curve will become flatter.
• E) The total industry profits will increase.

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Definitions:

Cash Collections

The activity of gathering and receiving cash payments from customers or clients, often related to sales or services provided.

Selling Price

The amount of money charged to the customer for a product or service.

Credit Sales

Sales made by a business allowing the buyer to pay at a later date.

Required Production

Indicates the amount of production needed to meet sales forecasts and inventory levels as determined by a company's production planning.