Which of the Following Average Cost Functions Suggests the Presence

question 24

Multiple Choice

Which of the following average cost functions suggests the presence of a natural monopoly?

• A) AC = 2
• B) AC = 100/Q + 2
• C) TC = 100/Q + 2Q
• D) All of the above.

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Definitions:

Standard Normal Variable

A random variable that has a mean of 0 and a standard deviation of 1, following the standard normal distribution.

Standard Normal Curve

The graphical representation of a normal distribution that has a mean of zero and a standard deviation of one, used in probability theory and statistics.

Z-score

A statistical measure representing the number of standard deviations a data point is from the mean.

Percentile

An indicator showing the value beneath which a certain percentage of data points in a collection of data lies.