Suppose that you build a high-speed, magnetically powered transportation system from New York to Los Angeles, and you are the only firm providing this service. High fixed costs resulting from the enormous quantity of capital used in this system enable decreasing average cost for any conceivable level of demand. Your monopoly would result from:
a. increasing returns to scale.
b. technological superiority.
c. control of a scarce resource or input.
d. government-set barriers.
a. increasing returns to scale.
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What is an incentive system?
What will be an ideal response?
A recent study by Andrew Rose of the University of California showed that, on average, two countries that are members of the same currency union
A) trade three times as much with each other as countries that do not share a currency. B) trade twenty times as much with each other as countries that do not share a currency. C) trade ten times as much with each other as countries that do not share a currency. D) trade six times as much with each other as countries that do not share a currency. E) trade twice as much with each other as countries that do not share a currency.
The process by which risks are shared among many different assets or people is called:
A. the credit risk. B. the risk spread. C. diversification. D. the liquidity process.
U.S. Steel considers the iron ore market thin because of:
a. the availability of wide range of ore producers. b. the scarcity of alternative ore suppliers. c. the volatility of ore prices. d. the low deliverability risks.