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
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Figure 18-3
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A. 1 B. 2 C. 3 D. 4