If a Natural Monopoly Was Forced to Break Up into Several

question 4

Multiple Choice

If a natural monopoly was forced to break up into several small competitive firms,the

• A)Cost of production should fall as the smaller firms become more efficient.
• B)Price charged by the competitive firms should decrease as the firms become more efficient.
• C)Price charged by the competitive firms should increase because they no longer have economies of scale.

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Definitions:

Microorganisms

Minute living organisms, including bacteria, viruses, fungi, and protozoa, that can only be seen under a microscope.

Accounts Payable

Money owed by a business to its suppliers or vendors for goods and services received but not yet paid for.

Travel Expense

Costs associated with traveling for the purpose of conducting business-related activities.

Purchase Price

The amount of money paid to acquire a product or service.