A Firm That Is a Natural Monopoly

question 448

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 diseconomies of scale.
• C)would experience a lower average total cost if more firms entered the market.
• D)All of the above are correct.

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Definitions:

Labor

The human effort, both physical and mental, used in the production of goods and services.

Leisure

Leisure refers to free time when one is not working and has no specific obligations, often used for rest, entertainment, or other personal activities.

Wage Rate

The amount of money paid to an employee per unit of time or per task performed, often expressed as an hourly rate.

Budget Equation

A mathematical representation summarizing the balance between an individual's or organization's income and expenditures.