A Type of Firm That Usually Has a Natural Monopoly

question 112

Multiple Choice

A type of firm that usually has a natural monopoly in most of its markets is a(n) :

• A) electric utility.
• B) major automobile producer.
• C) major retail establishment.
• D) commercial airline.

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Definitions:

Dissaving

Dissaving occurs when expenditures exceed income, leading to a depletion of savings or the accumulation of debt.

APC

The abbreviation for Average Propensity to Consume, which is the fraction of income that is spent on consumption rather than saved.

Marginal Propensity

This term explains the tendency of an individual or household to spend an additional unit of currency. For example, the marginal propensity to consume indicates how much consumption will increase with an additional dollar earned.

Disposable Income

The residual financial resources for households to use in saving and spending post paying income taxes.