When Demand and Cost Conditions Are Such That Only One

question 5

Multiple Choice

When demand and cost conditions are such that only one firm can exist in an industry:

• A) government must enact regulations to protect consumers and ensure competition.
• B) production costs could be decreased if government were to divide the single firm into several smaller firms.
• C) efficiency will be increased by dividing the single firm into several smaller firms.
• D) a natural monopoly is said to exist.

---

Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period of time.

Exchange Rates

The price of one currency in the terms of another, used to figure out the equivalent amount in a different currency.

Fiscal Year-End

The end of a company's accounting year, when it completes its annual financial statements and reports.

Foreign Currency Units

Foreign currency units refer to the various national currencies in which international transactions are denominated and financial statements of foreign operations are reported.