Which of the Following Is True Under Natural Monopoly

question 9

Multiple Choice

Which of the following is true under natural monopoly?

• A) The marginal cost curve will be equal to 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:

Capital Account

A national account that shows the net change in asset ownership for a country.

Revenue Account

An account that tracks the income earned from a company's primary operations.

Liability Account

An accounting record that captures the amount a company owes to others, such as loans, accounts payable, or mortgages.

Owner's Drawings Account

An equity account that tracks the amounts withdrawn by the owner(s) of a business from the company for personal use.