Figure 8.1 -Refer to Figure 8.1.Which of the Following Statements About the Statements

question 83

Multiple Choice

Figure 8.1
-Refer to Figure 8.1.Which of the following statements about the firm depicted in the diagram is true?

• A) The fact that this firm is a natural monopoly is shown by the continually declining long-run average total cost as output rises.
• B) The fact that this firm is a natural monopoly is shown by the continually declining market demand curve as output rises.
• C) The fact that this firm is a natural monopoly is shown by the continually declining marginal revenue curve as output rises.
• D) The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below the long-run average total cost where the firm maximises its profits.

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Definitions:

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Expenses that remain constant regardless of the amount of products made or sold, including rent, wages, and insurance premiums.

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A decision-making technique that involves comparing the costs and benefits of alternative actions.