Question

Consider the following for natural monopoly:
A. When the firm's average cost of producing a good continuously declines, a natural monopoly arises.
B. Under natural monopoly, economic profits are positive or greater than zero in equilibrium.
C. A market is a natural monopoly when a good is produced most economically by a single firm.
D. Natural monopoly follows marginal cost pricing at all times.
Choose the correct answer from the options given below:

• A. A and D only
• B. B and D only
• C. A and C only
• D. B and C only

Answer 1

Answer: (C)

A and C only

Answer 2

The correct answer is (C) : A and C only.