Question

Question 5 Not yet answered Points out of 3.00 Flag question Figure 15-1 tCasts ATC Quantity 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? Select one: O a. ownership of a key resource by a single firm b. natural monopoly c.government-created monopoly d. a patent or copyright monopoly O

Answer 1

Answer
Option b
Natural monopoly
The ATC curve slopes downward as the output increases mean it can produce more efficiently at large level of output than two or more firms, and that provides a barrier to entry for a new firm which is called a natural monopoly.