All of the Following,except One,are True Statements About a Natural

question 64

Multiple Choice

All of the following,except one,are true statements about a natural monopoly.Which one is the exception?

• A)It is able to produce at a lower cost than competing firms could.
• B)It has economies of scale and a declining LRAC over the relevant range of demand.
• C)The demand for its product is perfectly elastic.
• D)The demand is perfectly inelastic.

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Definitions:

Sales Tax

A tax imposed by governments on the sale of goods and services, calculated as a percentage of the sales price.

Proportional Rate Structure

A tax system where the tax rate remains constant regardless of the amount of income, as opposed to progressive or regressive tax structures.

Progressive Rate Structure

This is a tax system in which the tax rate increases as the taxable base amount increases, typically applied to incomes to ensure higher earners pay a greater percentage of their income.

Regressive Rate Structure

A tax system where the tax rate decreases as the taxable amount increases, placing a higher burden on lower earners relative to higher earners.