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28-05-2024
Business

Answered

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.

Answer :

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