When a firm's average-total-cost curve continually declines, the firm is:
A)a government-created monopoly
B)a resource monopoly
C)a natural monopoly
D)all of the above

Question

Quizplus · Accepted Answer

A firm with a continually declining average-total-cost curve is experiencing economies of scale, which is commonly associated with a natural monopoly. This means that as the firm produces more goods, its average costs decrease, making it more efficient in the long run. It is not necessarily a government-created or resource monopoly.

When a Firm's Average-Total-Cost Curve Continually Declines, the Firm Is