When plasma television sets were first introduced prices were high and few firms were in the market. Later, economic profits attracted new firms and the price of plasma televisions fell. This example illustrates
A) that consumers receive this new technology "free of charge" in the sense that they only have to pay a price for plasma televisions equal to the lowest production cost.
B) a decreasing-cost industry.
C) an industry with a low minimum efficient scale.
D) how fickle consumer demands are.
A
You might also like to view...
Predatory pricing is defined to be
A) collusive pricing. B) behavior designed to drive out current competition. C) cooperative behavior between two firms with monopoly power. D) collusion.
A firm's marginal cost equals the:
a. ratio of total cost to total quantity. b. slope of the demand curve under perfect competition. c. slope of the total product curve when the latter is at its maximum. d. change in total cost divided by the change in total output. e. slope of the supply curve.
The greater the area between the Lorenz curve and the diagonal line of absolute equality, the more inequality exists.
Answer the following statement true (T) or false (F)
A monopolist produces
a. more than the socially efficient quantity of output but at a higher price than in a competitive market. b. less than the socially efficient quantity of output but at a higher price than in a competitive market. c. the socially efficient quantity of output but at a higher price than in a competitive market. d. possibly more or possibly less than the socially efficient quantity of output, but definitely at a higher price than in a competitive market.