Which of the Following Is a Characteristic of a Natural

question 369

Multiple Choice

Which of the following is a characteristic of a natural monopoly?

• A)Average cost exceeds marginal cost over large regions of output.
• B)Increasing the number of firms increases each firm's average total cost.
• C)One firm can supply output at a lower cost than two firms.
• D)All of the above are correct.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet, often used to calculate the value of a company if it were to be liquidated.

Opportunity Cost

The price paid when one opts not to pursue the next most favorable choice during decision-making.

Cash Outlay

The actual amount of money spent or disbursed on goods, services, or assets.

Alternative Investments

Investments in asset classes other than stocks, bonds, and cash, including real estate, hedge funds, private equity, and commodities.