A Natural Monopoly

question 160

Multiple Choice

A natural monopoly

• A)has an average cost curve that reaches minimum possible average cost at a low level of output.
• B)has a marginal cost curve that is steeply upward sloping.
• C)is usually subject to antitrust suits.
• D)is usually allowed to choose its price so as to maximize profits in the United States.
• E)occurs when a single firm can supply the entire market demand for a product at a lower average cost than would be possible if two or more firms supplied the market.

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Definitions:

Euribor

The interest rate at which banks lend to each other in euros within the Euro interbank market.

Par Value

The face value of the bond. The payment to the bondholder on the bond’s maturity date.

Ask Price

The lowest price a seller is willing to accept for an asset in the market.

Corporate Bond

A debt security issued by a corporation to raise funding, which offers interest payments to holders until maturity.