Which of the following statements regarding natural

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9. Which of the following statements regarding natural monopoly is true? a. One firm can supply twice as much output as two smaller firms at the same average total cost. b. One firm can supply the entire market at a lower fixed cost than two or more firms. c. The source of monopoly power is the control of a key natural resource. d. Natural monopoly is most likely to occur in markets where fixed costs are very large relative to variable costs. 10. If cost conditions are such that competition leads to higher costs and higher prices, how should the market in question be characterized? 11. Which of the following types of firms use the marginal revenue equals marginal cost approach to maximize profits?
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CHAPTER 14 | Monopoly and Antitrust Policy 401 12. In which of the following cases is the firm’s demand curve the same as the market demand for the product? 13. Which firms face a downward-sloping demand curve and a downward-sloping marginal revenue curve? a. All price takers b. All price makers c. Monopolies only d. Monopolistic competitive firms only 14. When a firm’s demand curve slopes down and the firm decides to cut price, which of the following happens? 15. Refer to the table below. How much is the average revenue associated with serving five subscribers per month?
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402 16. Refer to the table below. How much is the marginal revenue associated with serving seven subscribers per month? 17. Refer to the graph below. In this graph, which curve is conceptually the same as average revenue ? a. The demand curve b. The marginal revenue curve c. Both curves d. Neither curve
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CHAPTER 14 | Monopoly and Antitrust Policy 403
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