Production efficiency under a natural monopoly is achieved
A. Where marginal cost equals demand.
B. Where marginal cost is minimized.
C. At capacity production where ATC is at a minimum.
D. Where marginal revenue equals marginal cost.
Answer: C
You might also like to view...
If there is a change in the U.S. endowment of factors of production, then there would be
A) shifts in just SRAS. B) a movement along the SRAS curve. C) a shift in both LRAS and SRAS. D) a shift in just LRAS.
In a recession, which unemployment rate is the highest?
A) the U-1 unemployment rate B) the U-6 unemployment rate C) the U-2 unemployment rate D) the U-3 unemployment rate E) None of the above answers is correct because the highest unemployment rate changes from one recession to the next.
A shock that increases the costs of production is a
A) positive aggregate demand shock. B) positive aggregate supply shock. C) negative aggregate demand shock. D) negative aggregate supply shock.
Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly decreases. What happens to the industry in the long run?
a. It experiences no change from the original equilibrium b. It experiences a higher equilibrium price and produces less output c. It experiences a lower equilibrium price and produces less output d. It experiences the same equilibrium price but produces more output e. It experiences the same equilibrium price but produces less output