Which of the following is true under natural monopoly?
A. The marginal cost curve will be equal to the average cost curve.
B. The monopolist will set price equal to marginal cost and will earn economic profits.
C. Economies of scale exist.
D. Output is produced under conditions of constant cost.
Answer: C
You might also like to view...
If a company offers a discounted price to college students, the legality of the practice will be evaluated under Section ________ of the Clayton Act.
A) 2 B) 3 C) 7 D) 8
In some areas, local appraisers have formed ________________________.
Fill in the blank(s) with the appropriate word(s).
If people held all their money as cash:
A. money would lose its value as a store of wealth. B. money would no longer be a financial liability of the Fed. C. banks could not create money. D. banks would still be able to create money by making loans.
Suppose policy makers implement an unexpected fiscal expansion. Further assume that monetary policy is expected to keep interest rates constant in response to this unexpected fiscal expansion. Given this information, we would expect that
A) stock prices will rise. B) stock prices will remain constant. C) this policy will have an ambiguous effect on stock prices. D) the effect on stock prices will depend on the slope of the IS curve.