Scenario 15-1 Consider a Transportation Corporation Named C.R. Evans That Has Just

question 291

Multiple Choice

Scenario 15-1
Consider a transportation corporation named C.R. Evans that has just completed the development of a new subway system in a medium-sized town in the Northwest. Currently, there are plenty of seats on the subway, and it is never crowded. Its capacity far exceeds the needs of the city. After just a few years of operation, the shareholders of C.R. Evans experienced incredible rates of return on their investment due to the profitability of the corporation.
-Refer to Scenario 15-1.Which of the following statements is most likely to be true?
(i) New entrants to the market know they will have a smaller market share than C.R.Evans currently has.
(ii) C.R.Evans is most likely experiencing decreasing average total cost.
(iii) C.R.Evans is a natural monopoly.

• A) (i) and (ii) only
• B) (ii) and (iii) only
• C) (i) and (iii) only
• D) (i), (ii), and (iii)

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