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:

Right Locations

Optimal or strategically chosen places for conducting business, ensuring accessibility, visibility, and profitability, tailored to the target market's preferences.

Supply Chain Management

The management of products, information, and monetary assets as they progress from suppliers to manufacturers, then wholesalers, retailers, and ultimately consumers.

Gross Margin

A financial metric that represents the difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue, indicating the profitability of a company's core activities.

Subcontractors

Independent entities hired by a primary contractor to perform a specific task as part of a larger project.