The Figure Below Shows the Demand Curve and the Long

question 50

Multiple Choice

The figure below shows the demand curve and the long run average cost curve for an electric company.
This market is a natural monopoly because

• A) the long run average cost curve is U-shaped
• B) when producing large quantities, the long run average cost is greater than demand
• C) when producing small quantities, the demand is higher than long run average cost
• D) the demand curve intersects the long run average cost curve at a point where the long run average cost curve is downward sloping

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