A Natural Monopoly Is a Market Where

question 6

Multiple Choice

A natural monopoly is a market where

• A) a single firm has control over a vital natural resource.
• B) many smaller firms can produce the entire market output at the same per-unit cost as could one large firm.
• C) a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms.
• D) many smaller firms can produce the entire market output at a lower per-unit cost than could one large firm.

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Definitions:

Futures Exchange

A central marketplace where individuals can buy and sell futures contracts and options on futures contracts.

Delivery Date

The specific date on a futures or options contract on which the underlying asset must be delivered or settled.

Futures Contracts

Standardized legal agreements to buy or sell something at a predetermined price at a specified time in the future.

Organized Exchange

A regulated market where securities, commodities, derivatives, and other financial instruments are traded.