Which of the Following Is a Characteristic of a Firm

question 11

Multiple Choice

Which of the following is a characteristic of a firm that is a natural monopoly?

• A) The firm's average costs decline over all levels of output.
• B) The firm's elasticity of supply is very low.
• C) The firm does not incur any sunk costs.
• D) The firm faces a horizontal demand curve.
• E) The firm makes zero economic profit.

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Definitions:

Capital Acquisitions

The process of procuring assets or capital goods that contribute to an organization's productive capacity, often involving significant investment.

Purchase Price

The amount of money paid to acquire a good or service, not including any additional costs like delivery or installation.

Supply Cost Savings

Reductions in the amount spent on acquiring goods or services, enhancing overall profitability.

Finance/Accounting

The field that deals with the study and application of various methods to collect, manage, and assess financial records and transactions of a business.