What Is a Major Characteristic of a Natural Monopoly

question 176

Multiple Choice

What is a major characteristic of a natural monopoly?

• A) The firm is a single seller of a resource.
• B) It sets price equal to marginal revenue.
• C) There is extensive product advertising.
• D) There is a large range for economies of scale.

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Definitions:

Variable Cost Per Unit

The cost that changes in proportion to the level of output or activity, calculated on a per-unit basis.

Net Operating Income

A company's total earnings derived from its operations, excluding taxes and interest.

Advertising

The activity or profession of producing advertisements for commercial products or services.

Contribution Format

A way of presenting a profit and loss statement where costs are separated into variable and fixed, and the contribution margin is highlighted.