When an Industry Is a Natural Monopoly

question 280

Multiple Choice

When an industry is a natural monopoly,

• A)it is characterized by constant returns to scale.
• B)it is characterized by diseconomies of scale.
• C)a larger number of firms may lead to a lower average cost.
• D)a larger number of firms will lead to a higher average cost.

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Definitions:

Alternative Hypothesis

The hypothesis that proposes there is a statistically significant difference between two variables, contrasted with the null hypothesis.

Population Mean

The average of all the values in a population, serving as a measure of central tendency for the entire population.

Sample Mean

The mean value derived from all the data points in a given sample.

True Null Hypothesis

The hypothesis that there is no effect or no difference, and it is the actual truth in the context of hypothesis testing.