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.

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Definitions:

Response Variable

The outcome variable on which comparisons are made, often dependent on the predictor or independent variables in a study.

Fuel Economy

A measure of how far a vehicle can travel on a given amount of fuel, often expressed in miles per gallon or liters per 100 kilometers.

Categorical Variable

A variable that can take on values that are names or labels, representing discrete categories or groups.

Scatterplot

A type of graph used in statistics to display values for typically two variables for a set of data, allowing for the observation of relationships.