Which of the Following Is NOT a Characteristic of Natural

question 21

Multiple Choice

Which of the following is NOT a characteristic of natural monopoly?

• A)Two or more firms experiencing economies of scale can produce the industry output at lower total cost than if a single firm produces the industry output.
• B)One firm can produce the industry output at a lower total cost than two or more firms.
• C)One firm is the technically efficient way to organize production.
• D)Production of the industry output is characterized by cost subadditivity.

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Definitions:

Economy

An area of the production, distribution, and trade of goods and services by different agents in a particular geographic region.

Ability-to-pay Taxation

A principle of taxation based on the belief that taxes should be levied according to an individual’s or entity’s capacity to pay, reflecting their income or wealth.

Progressive Tax Structure

A tax system in which the tax rate increases as the taxable amount increases, typically designed to distribute the tax burden more heavily on those with higher incomes.

High-income Receivers

Individuals or entities that receive a significantly higher amount of income compared to the median or average levels within a society or economic system.