A natural monopoly exists when a

A natural monopoly exists when a. a monopolist produces a product, the main component of which is a natural resource. Ob.economies of scale are so large that only one firm can survive and achieve low unit costs. Oc. a firm is the exclusive owner of a key resource necessary to produce the firm's product. d. there are no close substitutes for a firm's product. Oe. None of the above.

QUESTION 3 A natural monopoly exists when Oa, a monopolist produces a product, the main component of which is a natural resource. Ob.economies of scale are so large that only one firm can survive and achieve low unit costs. Oc a firm is the exclusive owner of a key resource necessary to produce the firm's product. d. there are no close substitutes for a firm's product. e. None of the above. QUESTION 4 Which of the following is the best example of a monopoly? Oa, a local public utility Ob. a fast-food restaurant O c. a department store d. a corn farmer

Suppose a firm must pay an annual franchise fee or tax, which is a fixed sum, independent of whether it produces any output or not. How does this tax affect the firm’s fixed, marginal and average costs