Which of the Following Is True Under Natural Monopoly

question 18

Multiple Choice

Which of the following is true under natural monopoly?

• A) The marginal cost curve will be above the average cost curve.
• B) The monopolist will set price equal to marginal cost and will earn economic profits.
• C) Economies of scale will be present.
• D) Output is produced under conditions of constant cost.

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Definitions:

Equality

The state of being equal, especially in status, rights, and opportunities.

Mutuality

A principle based on mutual interests, benefits, and cooperation between parties, often characterized by reciprocal actions.

Founder Syndrome

A phenomenon where organizations or businesses experience challenges stemming from the continuing dominance of the founder(s), potentially stifling growth, adaptation, or change.

Federation

An organization or group within which smaller divisions or parties agree to some central authority or governance.