Figure 15-9

question 16

Multiple Choice

Figure 15-9
Figure 15-9 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-9.Erickson Power is a natural monopoly because

• A) it is a power company and all power companies are natural monopolies.
• B) average total cost is still declining when it intersects demand.
• C) of its continually declining marginal revenue curve as output rises.
• D) its marginal cost lies entirely below its long-run average cost.

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Definitions:

Partnership Income

The total income earned by a partnership, distributed among partners according to the partnership agreement or ownership percentage.