A Natural Monopoly Is Defined as an Industry in Which

question 128

Multiple Choice

A natural monopoly is defined as an industry in which one firm

• A) can produce the entire industry output at a lower average cost than a larger number of firms could.
• B) can produce the entire industry output at a lower marginal cost than a larger number of firms could.
• C) is very large relative to other firms that could enter the industry.
• D) can earn higher profits if it is the only firm in the industry rather than if other firms also enter the industry.

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Definitions:

Duress

A condition where a person performs an act as a result of violence, threat, or other pressures against them, undermining their free will.

Privity of Contract

A legal doctrine stating that only parties involved in a contract are entitled to enforce it or be sued under it.

Royal Bank

Typically refers to a bank that has been granted a royal charter, recognizing it as a privileged financial institution.

Equitable Assignment

An equitable assignment is the assignment or transfer of rights or interests in a property or contract to another party, recognized by equity and not necessarily by law.