When economies of scale are important, imposing competition by splitting a monopolistic firm into many rival units will
a. lead to an increase in the per-unit cost of production in the industry.
b. not affect per-unit costs but will affect demand conditions.
c. generally increase the social efficiency of production.
d. cause the industry demand curve to increase (shift to the right).
A
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The problem of "double marginalization" is
a. The retail price being too low due to an absence of both manufacturer and retailer markup b. The retail price being too high due to the existence of both manufacturer and retailer markup c. The retail price consisting only of the manufacturer markup d. The retail price consisting only of the retailer markup
the highest raking officer of a corporation
What will be an ideal response?
In a perfectly competitive market in which all firms are maximizing their economic profits, the demand and supply curves intersect at a price of $10. From this we know that each
A. firm's average total cost of producing the good is $10. B. firm is earning positive economic profits at a price of $8 or more. C. firm's average variable cost of producing the good is $10. D. firm's marginal cost of producing the good is $10.
The reason that the "fast-casual" restaurant market is monopolistically competitive rather than perfectly competitive is because
A) barriers to entry are very low. B) there are many firms in the market. C) products are differentiated. D) entry into the market is blocked.