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

---

Definitions:

World's Output

The total production of goods and services by all countries around the globe over a specific time period.

Rules of The Game

Informal and formal institutions, norms, and conventions that shape interactions and decision-making in economic, social, and political environments.

Institutional Elements

Components of a society's system, including laws, regulations, norms, and conventions that shape economic and social interactions.

Property Rights

This term denotes the legal rights to own, use, and dispose of assets. It's a foundational element of market economies, affecting the allocation and use of resources.