A Firm That Is a Natural Monopoly

question 288

Multiple Choice

A firm that is a natural monopoly

• A)is not likely to be concerned about new entrants eroding its monopoly power.
• B)is taking advantage of economies of scale.
• C)would experience a higher average total cost if more firms entered the market.
• D)All of the above are correct.

---

Definitions:

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating leverage and financial health.

Days' Sales in Inventory

A financial metric that indicates the average time in days that a company takes to turn its inventory into sales.

Dividend Yield

A financial metric that measures the annual dividends issued by a company compared to the price of its shares.

Total Asset Turnover

A financial ratio that measures how efficiently a company uses its assets to generate sales revenue.