Figure 10-1

-Refer to Figure 10-1.Which of the following statements about the firm depicted in the diagram is true?

Question

Figure 10-1
 
-Refer to Figure 10-1.Which of the following statements about the firm depicted in the diagram is true?

Quizplus · Accepted Answer

A natural monopoly is characterized by declining long-run average total costs as output increases, which is shown in the diagram. The declining market demand curve (option B) is not necessarily an indicator of natural monopoly, and the declining marginal revenue curve (option C) is a result of the downward sloping demand curve rather than a characteristic of natural monopoly. The position of the marginal cost curve relative to the long-run average total cost curve (option D) is not a defining characteristic of natural monopoly.

Figure 10-1 -Refer to Figure 10-1.Which of the Following Statements About the Following