The Long-Run Average Cost Curve of a Natural Monopoly

question 235

Multiple Choice

The long-run average cost curve of a natural monopoly

• A) is positively sloped until it crosses the demand curve.
• B) intersects the demand curve while it is negative sloped.
• C) intersects the demand curve while it is positively sloped.
• D) is the natural monopoly's supply curve.
• E) is the same as the natural monopoly's demand curve.

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Definitions:

Ability-To-Pay Principle

The principle of tax fairness by which those with greater ability to pay a tax should pay more tax.

Ability-To-Pay

A concept in taxation that taxes should be levied according to an individual or entity’s ability to shoulder the tax burden.

Lump-Sum Tax

A tax that is the same for everyone, regardless of any actions people take.

Ability-To-Pay Principle

A taxation principle suggesting that taxes should be levied according to an individual's or entity's capability to bear the tax burden.