When the Average Cost Curve Declines After Intersecting the Demand

question 21

Multiple Choice

When the average cost curve declines after intersecting the demand curve for a natural monopoly,which of the following must necessarily be true?

• A)The marginal cost curve lies below the average cost curve at the point of intersection.
• B)Marginal cost is also declining after the point of intersection.
• C)The average cost curve and the marginal cost curve are parallel after the point of intersection.
• D)The price is equal to marginal cost

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Definitions:

Different Needs

Refers to the diverse requirements or desires of individuals or groups.

Formalization

The degree to which rules and procedures are standardized in an organization.

Rules And Procedures

Guidelines and systematic steps established for consistent and orderly conduct or action.

Standardized

The process or practice of making elements uniform or consistent by following a defined set of criteria or standards.