A Natural Monopoly Is a Situation That Occurs

question 5

Multiple Choice

A natural monopoly is a situation that occurs

• A) when an exotic plant kills off locals plants
• B) in industries where the cheapest way to obtain a given quantity of output is to have only one firm produce it
• C) Both answers are correct

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Definitions:

Expenses

Costs incurred in the process of generating revenues, representing the consumption of resources such as raw materials, labor, and overhead.

Accrual Basis

An accounting method that recognizes revenue when earned and expenses when incurred, regardless of cash flow.

Recognizes Expenses

The accounting process of formally recording or acknowledging that an expense has occurred, typically impacting the profit and loss statement.

Fiscal Year

A twelve-month period used for accounting purposes and preparing financial statements, which may not align with the calendar year.