The figure to the right shows the average cost of production (AC) for a cablecompany that is a monopoly as well as the corresponding demand (D) for cablesubscriptions in the city to which the company provides service.Is this company a natural monopoly?This firmO A. is a natural monopoly because average cost is decreasing when itcrosses demand.B.is not a natural monopoly because its demand is downward sloping.C. is a natural monopoly because total cost does not always increase withoutput.O D.is a natural monopoly because it has excess capacity.O E. is not a natural monopoly because it must advertise.Price (dollars per subscription)80-76-72-68-64-60-56-52-48-44-40-36-32-28-24-20-16-12-8-4-0-DAC5689Quantity (cable subscriptions in 1000s)Ⓡ10

A monopoly market is defined as the output produced by solely one market. The output price is…

The figure to the right shows the average cost of production (AC) for a cable company that is a monopoly as well as the corresponding demand (D) for cable subscriptions in the city to which the company provides service. Is this company a natural monopoly? This firm O A. is a natural monopoly because average cost is decreasing when it crosses demand. O B. is not a natural monopoly because its demand is downward sloping. C. is a natural monopoly because total cost does not always increase with output. O D. O E. is a natural monopoly because it has excess capacity. is not a natural monopoly because it must advertise. Price (dollars per subscription) 80 76- FONOS 724 68- 64- 60- 56- 52- 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- D 6 Quantity (cable subscriptions in 1000s) AC 10

The figure to the right shows the average cost of production (AC) for a cable company that is a monopoly as well as the corresponding demand (D) for cable subscriptions in the city to which the company provides service. Is this company a natural monopoly? This firm O A. is a natural monopoly because average cost is decreasing when it crosses demand. O B. is not a natural monopoly because its demand is downward sloping. C. is a natural monopoly because total cost does not always increase with output. O D. O E. is a natural monopoly because it has excess capacity. is not a natural monopoly because it must advertise. Price (dollars per subscription) 80 76- FONOS 724 68- 64- 60- 56- 52- 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- D 6 Quantity (cable subscriptions in 1000s) AC 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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