In Which of the Following Situations Would a Natural Monopoly

question 19

Multiple Choice

In which of the following situations would a natural monopoly exist?

• A)a firm has a government charter to be the sole producer of some good
• B)a firm is able to operate at the minimum point of its long-run average total cost curve
• C)a firm produces a product essential to national security
• D)only one firm is supplying a natural resource
• E)one firm can most efficiently supply the entire market demand

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Definitions:

Cash Realizable Value

The amount of money that can be obtained from an asset during its disposal or liquidation, after deducting any associated costs.

Note Receivable

This is a written promissory note where one party promises to pay another party a definite sum of money either on demand or at a specified future date.

Interest

The cost of borrowing money, expressed as a percentage of the total amount loaned, or the income earned on invested capital.

Note Receivable

A written promise that requires another party to pay the holder a specific sum of money on a specified date or on demand.