An Industry in Which Economies of Scale Allow One Firm

question 495

Multiple Choice

An industry in which economies of scale allow one firm to supply the entire market at the lowest possible cost is called a

• A) legal monopoly.
• B) natural monopoly.
• C) single-price monopoly.
• D) one-firm monopoly.

---

Definitions:

Demand Curve

A visual diagram showing the correlation between an item's price and the amount of it that consumers want to buy.

Profit Maximized

Profit maximized refers to a scenario where a firm achieves the highest possible profit from its operations, where marginal costs equal marginal revenue.

Marginal Profit

Marginal profit refers to the additional profit a company gains from selling one more unit of a good or service.

Marginal Revenue

The additional income gained by selling one more unit of a product or service.