In a Natural Monopoly

question 6

Multiple Choice

In a natural monopoly,

• A)society would be better off if antitrust laws were used to create many different firms in the market.
• B)the marginal cost curve is positively sloped.
• C)if the government requires marginal cost pricing, it will likely have to subsidize the firm.
• D)the marginal revenue curve is horizontal.

---

Definitions:

Expected Rates

The anticipated rates of return, interest, or growth in various contexts such as finance, investment, and economic forecasting.

Loanable Funds

The money available for borrowing in the financial markets, derived from savings and influenced by interest rates.

Nominal Interest Rates

The interest rate before taking inflation into account, representing the face value rate at which money can be borrowed.

R&D Decisions

Choices made by businesses or governments regarding the allocation of resources for research and development to innovate or improve products and services.