Consumers may not experience the benefits of economies of scale because a natural monopoly
A. Increases output beyond efficient levels.
B. Has higher costs with higher output.
C. Engages in marginal cost pricing.
D. Charges prices higher than competitive levels.
Answer: D
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When comparing public and private schools, the voluntary choice of going to a private school _____
a. is a Pareto optimal move b. is a Pareto superior move c. is neither Pareto optimal nor Pareto superior d. cannot be evaluated according to the Pareto criteria
A payment of $105 next year can be more valuable than a payment of $100 now
a. True b. False
What is a currency board?
a. A fixed exchange rate that, by law, exchanges domestic currency for a specified foreign currency at a fixed exchange rate. b. A floating exchange rate. c. A managed floating exchange-rate policy that the government adjusts periodically according to some economic indicator. d. A laissez-faire exchange-rate policy. e. An interventionist exchange-rate policy.
You're called in as a consultant: Price is $24 . At a production level of 200 units, MC = MR, AFC = $6, and AVC = $16 . What do you advise this firm to do?
a. Increase output. b. Decrease output. c. Shut down operations. d. Stay at 200 units; the firm is earning $400 profit. e. Stay at 200 units; the firm is minimizing losses of $200.