A natural monopoly is most likely to occur in which of the following industries?
A) the pharmaceutical industry because the development and approval of new drugs through the Food and Drug Administration can take more than 10 years
B) the software industry because of the importance of network externalities
C) an industry where fixed costs are very large relative to variable costs
D) the diamond mining and marketing industry because one firm can control a key resource
C
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The Fed can change the money supply by changing
A) the required reserve ratio. B) marginal income tax rates. C) federal excise taxes. D) unemployment benefits.
Which of the following is not an automatic stabilizer?
a. the minimum wage b. the unemployment compensation system c. the federal income tax d. the welfare system
In 1968, economist Milton Friedman published a paper criticizing the Phillips curve on the grounds that
a. it seemed to work for wages but not for inflation. b. monetary policy was ineffective in combating inflation. c. the Phillips curve did not apply in the long run. d. Phillips had made errors in collecting his data.
In economics, when discussing Tessa's "demand for money," we mean
a) how much cash Tessa would like to have b) the income that Tessa would need, per time period, to satisfy her minimum living requirements c) how much wealth Tessa would like to have d) the quantity of Tessa's financial assets that she wishes to hold in non-interest-bearing form e) all of the above