If a Natural Monopoly Is Allowed to Set Its Price

question 514

Multiple Choice

If a natural monopoly is allowed to set its price above its average total cost, then

• A) the company makes an economic profit.
• B) the company incurs an economic loss.
• C) competitors will enter the market.
• D) the company will produce more than the efficient amount of output.

---

Definitions:

Out-Groups

Social groups to which an individual does not identify or belong, often viewed with prejudice or hostility by members of the in-group.

Political Party

An organized group of people with similar political aims and opinions, seeking to influence public policy by getting its candidates elected to public office.

Religious Beliefs

Personal or cultural beliefs related to the existence, nature, and worship of a deity or deities, and the spiritual aspects of life.

Discrimination

Overt negative and unequal treatment of the members of some social group or stratum solely because of their membership in that group or stratum.