Natural monopolies are the natural result of:
A. competition in markets where economies of scale exist over the relevant range of output.
B. geographical happenstance.
C. fierce competition from firms in a market.
D. government regulations intended to encourage competition.
A. competition in markets where economies of scale exist over the relevant range of output.
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Refer to Figure 13-3. Suppose the economy is at point A. If investment spending increases in the economy, where will the eventual long-run equilibrium be?
A) A B) B C) C D) D
If firms differentiate their products in different ways and charge different price because of these differentiation factors, then
A) demand must be perfectly elastic. B) the law of one price is not violated. C) transactions costs are being ignored. D) the firm must not be maximizing profit.
Options do not eliminate the risks but they give people choices about which risks they will hold and help to price those risks they might wish to assign to others
Indicate whether the statement is true or false
Economists believe the free rider problem is very important in complex business organizational structures. Still, businesses continue to build teams to solve problems or to deliver products to consumers. Often special rewards or bonuses are provided to the team rather than to the individuals in the team. Write a brief essay that either defends the economists' concern or explains why economists are wrong on this issue.
What will be an ideal response?