Consider the market for cable television in the figure above. This graph depicts a natural monopoly because the
A) marginal cost curve is constant.
B) demand curve is downward sloping.
C) average cost curve is declining as it crosses the demand curve.
D) marginal revenue curve is downward sloping.
C
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A market's structure is described by
A) the number of firms in the market. B) the ease with which firms can enter and exit the market. C) the ability of firms to differentiate their product. D) All of the above.
Compared with average cost at the quantity that an unregulated monopolist would choose, average costs are higher at the quantity chosen by a monopoly facing an average-cost pricing policy.
Answer the following statement true (T) or false (F)
Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers. In the interest of efficiency, what is the desirable outcome?
A) Allow the Canadian farmers to sell their wheat for a lower price. B) Pass a law in Canada mandating a minimum price for wheat equal to what is charged by U.S. farmers. C) Pass a law in the United States mandating a maximum price for wheat equal to what is charged by Canadian farmers. D) Have U.S. citizens boycott Canadian wheat.
To help developing nations strengthen their international competitiveness, many industrial nations have granted tariff reductions to developing nations under the
A) international commodity agreements program. B) multilateral contract program. C) generalized system of preferences program. D) export led growth program. E) import substitution policy.