Scenario 14-2 Consider a Local,privately-Owned Electrical Cooperative Named Minny County Megawatts (MCM,LLC).MCM

question 72

Multiple Choice

Scenario 14-2
Consider a local,privately-owned electrical cooperative named Minny County Megawatts (MCM,LLC) .MCM has just completed a natural-gas-burning electrical power plant in the Midwest.Currently,MCM can meet the electricity needs of all residents in the county.In fact,its capacity far exceeds the needs of the county.After just a few years of operation,the shareholders of MCM experienced incredible rates of return on their investment due to the profitability of the corporation.
-Refer to Scenario 14-2.Which of the following statements is most likely to be true? (i) New entrants to the market know they will have a smaller market share than MCM currently has.
(ii) MCM would experience higher profits if it were government-run.
(iii) MCM is a natural monopoly.

• A) (i)and (ii)only
• B) (ii)and (iii)only
• C) (i)and (iii)only
• D) (i),(ii),and (iii)

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Definitions:

Work Rules

Formal regulations or policies dictating the conditions and behaviors allowed in a workplace.

Demand Curve

An illustrative chart that depicts how the demand for a product varies with its price.

Price of Capital

The cost of using capital goods for production, which can include interest rates, leasing costs, or other expenses related to capital utilization.

Productivity of Labor

The measurement of the amount of goods and services produced per hour of labor.