Why is the advent of monopoly likely to shift cost curves?
What will be an ideal response?
The advent of a monopoly may shift the average and marginal cost curves. One reason for higher costs is advertising. Another reason is the sheer size of the monopolist’s organization, which may lead to bureaucratic inefficiencies, coordination problems, and the like. At the same time, a monopolist may be able to eliminate certain types of duplication that are unavoidable for a number of small, independent firms. In addition, the large scale of the monopoly firm’s input purchases may permit it to take advantage of quantity discounts by its input suppliers that are not available to small competitive firms.
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Suppose you decide to attend summer school and that this is considered a rational choice. When making this choice,
A) you considered the marginal cost and marginal benefit of your choice. B) you must ignore the problem of scarcity. C) you must have considered the social interest. D) you have made a positive statement. E) you have used the ceteris paribus assumption.
The Hernandez family is buying a house. They have submitted several offers, and one was finally accepted. The time they spent submitting offers is considered part of the
a. negative spillover b. profit margin c. market price d. transaction cost
Variable inputs are defined as any resource that:
A. varies with the size of the firm's plant. B. cannot be changed as output changes. C. can be changed as output changes. D. can be increased or decreased hourly.
With price? discrimination, a monopoly
A) converts consumer surplus into economic profit.
B) converts producer surplus into economic profit.
C) can charge a single price to all customers.
D) produces less output than if it does not price discriminate.
E) converts consumer surplus into dead weight loss.