Natural Monopolies Form When

question 39

Multiple Choice

Natural monopolies form when

• A)small firms merge to form larger firms
• B)one firm has control over the entire supply of a basic input required to produce the product
• C)one firm's monopoly position is created and enforced by the government
• D)one firm receives patent protection for certain basic production processes
• E)long-run average cost declines as a firm expands output

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Definitions:

Exponential Equation

An equation where the variable appears in the exponent, expressing the relationship between two quantities where one varies as a constant power of another.

Decimal Places

The count of numbers present after the decimal point in a decimal numeral.

Annual Interest Rate

The percentage of principal charged by lenders or paid to investors per annum.

Compounded Continuously

A calculation involving the natural exponential function for the interest that is added to an amount of money based on an infinitely small rate over a period of time.