This market is a natural monopoly because
A. the long run average cost curve is U-shaped
B. when producing large quantities, the long run average cost is greater than demand
C. when producing small quantities, the demand is higher than long run average cost
D. the demand curve intersects the long run average cost curve at a point where the long run average cost curve is downward sloping
Answer:D
This market is a natural monopoly because
A. the long run average cost curve is U-shaped B. when producing large quantities, the long run average cost is greater than demand C. when producing small quantities, the demand is higher than long run average cost D. the demand curve intersects the long run average cost curve at a point where the long run average cost curve is downward sloping
Explanation: 62. The following graph shows the demand curve for a good and the long run average cost curve for a typical firm in this market.