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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