-The Graph Shows a

question 116

Multiple Choice

-The graph shows a

• A) positive relationship that becomes less steep.
• B) negative relationship that is linear.
• C) positive relationship that is linear.
• D) negative relationship that become less steep.
• E) None of the above answers is correct.

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Definitions:

Barriers to Entry

Factors that prevent or impede the ability of a new competitor to enter and operate in an industry.

Monopoly

An economic condition where only one seller offers a distinctive product in the marketplace, with no similar alternatives available.

Natural Monopoly

A market condition where due to high fixed or start-up costs, efficient service is provided by a single firm instead of multiple competing firms, often seen in utilities sectors.

Fair-Return Price

For natural monopolies subject to rate (price) regulation, the price that would allow the regulated monopoly to earn a normal profit; a price equal to average total cost.