Figure 11-6

The industry described in Figure 11-6

A. is not a natural monopoly because no firm would produce in the long run unless the government intervened in the market.
B. is not a natural monopoly because the average total cost curve is U shaped.
C. is a natural monopoly because the economic profit is positive for a monopolist if the government doesn’t intervene.
D. is a natural monopoly because price is less than average total cost at the output that would be produced by the industry under perfect competition.


Answer: D

Economics

You might also like to view...

Hedging risk for a short position is accomplished by

A) taking a long position. B) taking another short position. C) taking additional long and short positions in equal amounts. D) taking a neutral position.

Economics

Which of the following could result in a negative network externality?

a. snob effect; standardization b. bandwagon effect; congestion c. bandwagon effect; standardization d. snob effect; congestion

Economics

The demand for computer programmers is inseparably tied to the supply of computer software

a. True b. False Indicate whether the statement is true or false

Economics

Figure 18-3 In which panel of Figure 18-3 would an excise tax be borne entirely by the supplier?

A. 1 B. 2 C. 3 D. 4

Economics