A firm whose average total cost continually declines at least to the quantity that could supply the entire market is known as a ?
Correct answer: A. natural monopoly
- A. natural monopoly
- B. perfect competitor
- C. government monopoly
- D. regulated monopoly
Explanation
When average total cost keeps falling over the entire market demand, one large firm can supply the market more cheaply than several smaller firms. This cost structure creates a natural monopoly.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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