When a Monopolist Faces a U-Shaped Average Cost Curve in the Short

question 101

Multiple Choice

When a monopolist faces a U-shaped average cost curve in the short run as more and more output is produced,the upward-sloping portion of the curve is the result of

• A) an upward-sloping demand curve.
• B) the law of diminishing marginal returns.
• C) economies of scale.
• D) an increase in taxes.
• E) a vertical supply curve.

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Definitions:

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Financial contracts obligating the buyer to purchase, and the seller to sell, an indexed number of S&P 500 stocks at a future date, at a price agreed upon today.

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A measure of a stock's volatility in relation to the overall market, indicating its risk level compared to the market average.

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