If a firm has a downward-sloping long-run average cost curve over the entire range of market demand, it is a _____.

Question

If a firm has a downward-sloping long-run average cost curve over the entire range of market demand, it is a _____.​

Quizplus · Accepted Answer

A downward-sloping long-run average cost curve over the entire range of market demand is a characteristic of a natural monopoly, where it is more efficient for one firm to produce the entire output of the market due to high fixed costs and decreasing average costs. This is not typical in perfectly competitive, monopsony, or oligopoly markets.

If a Firm Has a Downward-Sloping Long-Run Average Cost Curve