If a Natural Monopoly Decreases the Quantity of Output It

question 68

Multiple Choice

If a natural monopoly decreases the quantity of output it produces:

• A)its average costs will decrease.
• B)its average costs will increase.
• C)it will have to decrease the price that it charges.
• D)its profits will increase.

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Definitions:

Transfer Price

The cost applied to goods or services exchanged between units or branches of the same organization.

Antennae Division

A specialized unit or department within an organization focused on telecommunications or related technological functions, involving the use of antenna systems.

Outside Supplier

A third-party company that provides goods or services to another company as part of the purchasing company's supply chain.

Variable Expenses

Financial outlays that fluctuate based on the rate of business or manufacturing activities.