When Does a Natural Monopoly Occur

question 230

Multiple Choice

When does a natural monopoly occur

• A)when the product is sold in its natural state (such as water or diamonds)
• B)when there are economies of scale over the relevant range of output
• C)when the firm is characterized by a rising marginal-cost curve
• D)when production requires the use of free natural resources, such as water or air

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Definitions:

Theoretical Formulations

Conceptual frameworks or sets of propositions that are put forward to explain phenomena or guide research and practice in a field.

Ethical Theory

A branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behavior.

Moral Theory

A system of thought that deals with ethics, or the principles of right and wrong behavior.

Ethical Dilemmas

Situations in which a person must choose between competing moral principles or values, often with no clear right answer.