Which of the Following Is True Under Natural Monopoly

question 36

Multiple Choice

Which of the following is true under natural monopoly?

• A) The marginal cost curve will be above the average cost curve.
• B) The monopolist will set price equal to marginal cost and will earn economic profits.
• C) Economies of scale exist.
• D) Output is produced under conditions of constant cost.

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Definitions:

Basic Rest-activity Cycle

A circadian rhythm concept suggesting that individuals have intrinsic cycles of rest and activity, notably proposed by sleep researcher Nathaniel Kleitman.

1 Hour

A measure of time equivalent to 60 minutes or 3,600 seconds.

1.5 Hours

A measure of time equivalent to ninety minutes.

3.5 Hours

A period of time equal to three and a half hours or 210 minutes.