In the Case of a Natural Monopoly, as the Number

question 107

Multiple Choice

In the case of a natural monopoly, as the number of firms in the industry increases, the average cost of producing a:

• A) fixed number of units decreases.
• B) fixed number of units stays the same.
• C) variable number of units stays the same.
• D) fixed number of units increases.

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Definitions:

Held-to-maturity Securities

Debt securities that an investor intends to hold until a fixed maturity date.

Debt Securities

Financial instruments that represent a loan made by an investor to a borrower, typically including terms for interest payments and the return of principal at maturity.

Fixed Maturity

A term related to fixed-income investments indicating the set date when the principal amount of the investment is paid back to the investor.

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks, which provide shareholders with claims on assets and earnings.