Which of the Following Statements Is (Are) TRUE

question 101

Multiple Choice

Which of the following statements is (are) TRUE?
I. A natural monopoly owes its existence to economies of scale.
II. In contrast to a monopoly industry, industries served by natural monopolies have no barriers to entry.
III. Natural monopolies have cost structures characterized by small fixed costs and steeply rising marginal costs.

• A) I and II
• B) I
• C) III
• D) II and III

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Definitions:

Nominal GDP

The gross domestic product measured at current market prices, not adjusting for inflation, reflecting the value of all goods and services produced.

Real GDP

The total value of all goods and services produced by an economy over a specific time period, adjusted for inflation.

Price Level

The mean of present prices for all goods and services produced within an economy, typically gauged by a price index.

Exchange Rate

the value of one currency for the purpose of conversion to another, showing how much of one currency can be exchanged for a unit of another currency.