A Natural Monopoly Forms When _____

question 159

Multiple Choice

A natural monopoly forms when _____

• A)small firms merge to form larger firms.
• B)one firm has control over the entire supply of a basic input required to produce the product.
• C)one firm's monopoly position is created and enforced by the government.
• D)one firm receives patent protection for certain basic production processes.
• E)the long-run average cost incurred by a firm declines as the firm expands output.

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Definitions:

Prices

The amount of money required to purchase goods or services.

Inflation Rate

The pace at which the average cost of goods and services increases, leading to a reduction in buying power.

General Level

A term that might refer to the overall state or condition of something, but not a specific financial term.

Prices For Goods

The amount of money required to purchase products, which can fluctuate based on factors like supply, demand, and inflation.