Figure 15-1 -Refer to Figure 15-1. Which of the Following Statements About

question 231

Multiple Choice

Figure 15-1
-Refer to Figure 15-1. 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 maximizes its profits.

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Definitions:

Movie Theater

A place where films are shown to the public for entertainment, typically featuring large screens and seating areas.

Electric Power Company

A business entity that generates, transmits, and distributes electricity to consumers and businesses.

Total Profits

The total earnings of a business after subtracting all costs and expenses from the total revenue.

Single-Price Monopoly

A market structure where the monopolist charges all consumers the same price for its sole product.