In a Natural Monopoly, Throughout the Range of Market Demand

question 6

Multiple Choice

In a natural monopoly, throughout the range of market demand,

• A)marginal cost exceeds average cost and therefore pulls average cost upward
• B)average cost exceeds marginal cost and therefore pulls marginal cost upward
• C)marginal cost is below average cost and therefore pulls average cost downward
• D)average cost is equal to marginal cost
• E)there are diseconomies of scale

---

Definitions:

Binomial Random Variable

A random variable that has only two possible outcomes, typically described as success and failure, in a series of experiments.

Fixed Period

A set length of time during which certain activities or events are scheduled to occur or conditions are meant to remain unchanged.

Expected Value

The anticipated value or mean of a random variable, representing the center of its distribution.

Portfolio

A selection of monetary assets, covering equities, fixed-income securities, commodity holdings, liquid assets, and assets nearing cash, containing mutual funds and Exchange-Traded Funds.