When an Industry Is a Natural Monopoly

question 107

Multiple Choice

When an industry is a natural monopoly:

• A)an increase in the number of firms may lead to a lower average cost
• B)an increase in the number of firms will lead to a higher average cost
• C)the firm has control over a natural resource
• D)it is characterised by diseconomies of scale

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Definitions:

Impulsiveness

Exhibiting actions based on sudden desires rather than careful thought, showing a lack of deliberation or awareness of potential outcomes.

Perseveration

The repetition of a particular response (such as a word, phrase, or gesture) despite the absence or cessation of a stimulus, often associated with various forms of brain damage or mental illness.

Egocentrism

A lack of ability to separate one's personal perspective from the perspective of others.

Centration

A cognitive limitation in early childhood where the child focuses on one aspect of a situation, neglecting other important features.