In a natural monopoly, throughout the range of market demand
A) marginal cost is above average total cost and pulls average total cost upward.
B) marginal cost is below average total cost and pulls average total cost downward.
C) there are diseconomies of scale.
D) average total cost is above marginal cost and pulls marginal cost upward.
B
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Assuming all excess reserves are loaned out, currency holdings by the public are zero, and a reserve ratio of 2 percent, an initial deposit of $500 will lead to a total increase in deposits of
A) $250. B) $5,000. C) $25,000. D) $50,000.
When there are very few substitutes for a good, the demand for the good will tend to be
A) inelastic. B) elastic. C) unitary. D) perfectly elastic.
Which of the following most accurately describes the invisible hand concept?
a. Wise central planning by government is necessary for the efficient use of resources. b. In a democratic setting, majority rule will result in the efficient use of resources. c. In a market setting, when individuals pursue their own interests, they simultaneously tend to promote the public interest. d. In a market setting, when individuals pursue their own interests, they tend to engage in activities that lower the overall economic welfare of society.
As the marginal propensity to consume (MPC) decreases, the spending multiplier
a. increases. b. decreases. c. remains constant. d. becomes indefinable.