When a firm experiences declining long-run average total costs as it produces more output, it is known as a(n)
A) oligopoly.
B) rent seeker.
C) natural monopoly.
D) monopolistic competitor.

Question

Quizplus · Accepted Answer

When a firm experiences declining long-run average total costs as it produces more output, it is known as a natural monopoly. This is because the firm has a high fixed cost and is able to spread this cost over a larger number of outputs, resulting in lower average costs for each unit produced.

When a Firm Experiences Declining Long-Run Average Total Costs as It