If There Is Just One Producer in an Industry Where

question 142

Multiple Choice

If there is just one producer in an industry where the average total cost curve declines throughout the output range up to where it intersects the industry demand curve:

• A)the industry will be a natural monopoly.
• B)charging a price equal to marginal cost would entail economic losses for the producer.
• C)charging a price equal to average cost would entail a welfare cost.
• D)if the producer was left free to choose its profit maximizing price, less than the efficient amount would be produced.
• E)all of the above would be true.

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