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 suggests that the firm experiences significant economies of scale over a wide range of output, which is characteristic of a natural monopoly. This occurs when a single firm can supply a good or service to an entire market at a lower cost than could two or more firms.

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