Natural monopolies:
A. are the only monopolies that are efficient.
B. can capture the lowest production costs possible for the industry.
C. are always protected by government policy.
D. generally earn zero accounting profits due to regulations.
B. can capture the lowest production costs possible for the industry.
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A tradeoff is
A) represented by a point inside a PPF. B) represented by a point outside a PPF. C) a constraint that requires giving up one thing to get another. D) a transaction at a price either above or below the equilibrium price.
Which of the following statements regarding preferences and indifference curves is true?
A. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle on the lower indifference curve. B. A consumer is indifferent between two consumption bundles that are on the same indifference curve. C. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the right on an indifference curve. D. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the left on an indifference curve.
A shift occurs in the supply curve for salt when:
A. the price of salt increases. B. improvements are made in the production process. C. salt is found to be associated with high blood pressure. D. consumers expect the price of salt to increase in the future.
When a proposed merger between two companies is reviewed by the government, the relevant market is defined by
A) whether or not there are close substitutes for the products of the two firms. B) how elastic the demand is for each firm's product. C) counting the number of firms that produce the same product. D) how much advertising is done in the industry.