A Natural Monopoly Is Most Likely to Result If a Single

question 125

Multiple Choice

A natural monopoly is most likely to result if a single firm:

• A) is the only seller in a community.
• B) is investor-owned, but is granted the exclusive right by the government to operate in a market.
• C) experiences economies of scale over a wide range of output.
• D) has gained control over a strategic input of an important production process.

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Definitions:

Consent Decrees

Legal agreements that settle a dispute between two parties without admission of guilt but with an agreement to stop the contested activities.

Marginal Revenue

The additional earnings obtained from selling one more unit of a product or service.

Demand Schedule

A table that shows the relationship between the price of a good and the quantity demanded.

Monopoly

A market structure dominated by a single seller, facing no competition in offering a unique product or service, allowing them to control prices and market conditions.