In a Natural Monopoly,the Long-Run Average Cost Curve

question 66

Multiple Choice

In a natural monopoly,the long-run average cost curve

• A)is downward sloping in the relevant range of output levels.
• B)is horizontal in the relevant range of output levels.
• C)is upward sloping in the relevant range of output levels.
• D)may be either upward sloping or downward sloping in the relevant range of output levels.
• E)lies below the marginal cost curve.

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Definitions:

Marginal Cost

The extra expense involved in creating an additional unit of a product or service.

Variable Costs

Costs that vary directly with the level of production or the volume of output.

Lease

A contract by which one party conveys land, property, services, or goods to another for a specified period, usually in exchange for periodic payments.

Bouquets

A collection or arrangement of flowers.