Figure 14-1
-Refer to Figure 14-1.The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market.Which of the following monopoly types best coincides with the figure?

Question

Figure 14-1 
-Refer to Figure 14-1.The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market.Which of the following monopoly types best coincides with the figure?

Quizplus · Accepted Answer

The shape of the curve resembles that of a natural monopoly, where there are high fixed costs and economies of scale that lead to decreasing average total cost as output increases. This creates a barrier to entry for potential competitors because they cannot produce at the same low cost as the existing monopolist.

Figure 14-1 -Refer to Figure 14-1.The Shape of the Average Total Cost