If an Industry's Demand Conditions Allow at Most One Firm

question 38

Multiple Choice

If an industry's demand conditions allow at most one firm to cover its costs while producing at its minimum efficient scale (MES) ,this situation is known as

• A)a discriminating monopoly.
• B)a natural monopoly.
• C)declining marginal revenue.
• D)limited competition.
• E)natural economic limits.

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Definitions:

Staples

Basic or essential goods and services that are consumed regularly by individuals or businesses.

Paper Clips

Paper clips are small pieces of bent wire or plastic used for holding sheets of paper together.

Marginal Utility

The additional satisfaction or utility that a person receives from consuming one additional unit of a good or service.

Milkshakes

A sweet, creamy beverage made by blending milk, ice cream, and flavorings or sweeteners such as butterscotch, caramel sauce, or chocolate syrup.