The industry described in Figure 11-6
a. is not a natural monopoly because no firm would produce in the long run unless the government intervened in the market.
b. is not a natural monopoly because the average total cost curve is U-shaped.
c.is a natural monopoly because the economic profit is positive for a monopolist if the government doesn't intervene.
d. is a natural monopoly because price is less than average total cost at the output that would be produced by the industry under perfect competition.
Answer is d. is a natural monopoly because price is less than average total cost at the output that would be produced by the industry under perfect competition.
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A. $87,000. B. $97,500. C. $130,000. D. $118,500.
If an average cost pricing rule is imposed on the firm in the figure above, the firm will produce
A) 5 units. B) 20 units. C) 30 units. D) 40 units.
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Indicate whether the statement is true or false
The profit-maximizing monopolist, faced with a negative-sloping demand curve, will always produce:
a. at an output greater than the output where average costs are minimized b. at an output short of that output where average costs are minimized c. at an output equal to industry output under pure competition d. a and c e. none of the above