Figure 15-1
-Refer to Figure 15-1. 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?
A)ownership of a key resource by a single firm
B)natural monopoly
C)government-created monopoly
D)a patent or copyright monopoly

Question

Figure 15-1 
-Refer to Figure 15-1. 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?
A)ownership of a key resource by a single firm 
B)natural monopoly 
C)government-created monopoly 
D)a patent or copyright monopoly

Quizplus · Accepted Answer

The shape of the average total cost curve in this figure indicates a natural monopoly, where economies of scale allow a single firm to produce at a lower average cost than any potential competitors, creating a barrier to entry. Ownership of a key resource (A), government-created monopoly (C), and a patent or copyright monopoly (D) may also create barriers to entry, but the shape of the average total cost curve is not necessarily indicative of these types of monopolies.

Figure 15-1 -Refer to Figure 15-1. the Shape of the Average Total