A natural monopoly exists when
A) the firm holds a patent.
B) there are governmental entry restrictions.
C) the firm owns all of the raw materials needed to produce the product.
D) economies of scale occur.
Answer: D
You might also like to view...
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
An important lesson of the Chilean crisis was that
a. inflows of foreign capital should be strictly regulated b. governments should ensure that the current account balance is kept close to 0 c. governments need to maintain regulation and oversight of the banking sector d. government intervention in financial matters leads to capital flight e. none of the above
What is a better pricing strategy for the monopolist? At this price, what are the total profits to the monopolist?
a. Bundle the goods at $4,500 . Profits=$9,000 b. Bundle the goods at $6,000 . Profits=$12,000 c. Bundle the goods at $5,000 . Profits=$10,000 d. Bundle the goods at $9,500 . Profits=$19,000
What is the term economists use to discuss cost on a per-unit-of-output basis?
a. short-run cost b. fixed cost c. variable margin cost d. average total cost