Suppose a Firm Is a Natural Monopoly

question 319

Multiple Choice

Suppose a firm is a natural monopoly. Then, until the long-run average cost curve crosses the demand curve, as the quantity increases the long-run average costs

• A) increase.
• B) decrease.
• C) decrease and then increase.
• D) increase and then decrease.

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Definitions:

Significant Term

A significant term in a contract is a provision that is essential to the agreement, often impacting the performance, duties, and rights of the parties involved.

Minor Failure

A small or insignificant defect or flaw, especially in a product, system, or mechanism, that does not generally inhibit its intended function.

Repudiation

The rejection or refusal to acknowledge or pay a debt or fulfill a contractual obligation, often leading to a breach of contract claim.

Frustration

A legal doctrine that excuses parties from fulfilling their contract obligations due to unforeseen circumstances rendering the contract impossible, illegal, or radically different.