Figure 13.9 Figure 13.9 Shows the Cost and Demand Curves for the and Demand

question 55

Multiple Choice

Figure 13.9

Figure 13.9 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 13.9.Erickson Power is a natural monopoly because

• A)it is a power company and all power companies are natural monopolies.
• B)average total cost is still declining when it intersects demand.
• C)of its continually declining marginal revenue curve as output rises.
• D)its marginal cost lies entirely below its long-run average cost.

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Definitions:

Capitalist Economy

An economic system where private individuals or businesses own capital goods, and the production of goods and services is based on supply and demand.

Employment Discrimination

Occurs when a job applicant or employee is treated unfavorably because of characteristics, such as race, gender, age, or disability, that are unrelated to their job performance.

Earnings

The amount of profit that a company produces during a specific period, which is a key indicator of its financial health.

Short-Run Cost Curves

Graphical representations showing how a firm's costs change in relation to output level in the short term, where some inputs are fixed.