Which Barrier to Entry Results in the Creation of a Natural

question 61

Multiple Choice

Which barrier to entry results in the creation of a natural monopoly?

• A) legal barriers like government franchises
• B) economies of scale
• C) ownership of a vital resource
• D) patents and copyrights

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Definitions:

Interest Rate Risk Premiums

Additional returns demanded by investors to compensate for the risk of fluctuating interest rates.

D Credit Rating

A rating indicating that an entity is in default, having failed to fulfill its credit obligations, the lowest possible rating in assessments of credit risk.

Credit Rating

A formal assessment of an entity's ability to repay its debts, often in the form of a letter grade.

Term Structure

The relationship between interest rates or yields and different maturities for debt securities, often depicted as a yield curve.