The Industry Described in Figure 11-6

The industry described in Figure 11-6

A) is not a natural monopoly because no firm would produce in the long run unless the government intervened in the market.
B) is not a natural monopoly because the average total cost curve is U shaped.
C) is a natural monopoly because the economic profit is positive for a monopolist if the government doesn't intervene.
D) is a natural monopoly because price is less than average total cost at the output that would be produced by the industry under perfect competition.

Correct Answer:

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