When a firm experiences steadily declining long-run average total costs as it produces more output, it is known as a(n)
A) oligopoly.
B) rent seeker.
C) natural monopoly.
D) monopolistic competitor.

Question

Quizplus · Accepted Answer

When a firm experiences steadily declining long-run average total costs as it produces more output, this indicates that the firm is able to achieve economies of scale. This is a characteristic of a natural monopoly, where the firm's cost advantage makes it difficult for potential competitors to enter the market.

When a Firm Experiences Steadily Declining Long-Run Average Total Costs