Multiple Choice
Suppose a firm has a variable cost function VC = 20Q with avoidable fixed cost of $50,000.What kind of firm is this?
A) This firm is a natural monopoly because as Q rises, AC falls.
B) This firm is a natural monopoly because as Q rises, AC rises.
C) This firm is a natural monopoly because as Q rises, VC falls.
D) This firm is a natural monopoly because as Q rises, VC rises.
Correct Answer:
Verified
Correct Answer:
Verified
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