Ford Motor Company started producing the Model A at plants scattered around the United States
A) to save on transport costs.
B) because diseconomies of scale at its initial River Rouge plant resulted in high production costs.
C) to locate its production centers closer to its customers.
D) because it was not able to attract skilled workers in Michigan (where its first plant was located).
Answer: B
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Which barrier to entry results in the creation of a natural monopoly?
a. Legal barriers like government franchises. b. Economies of scale. c. Ownership of a vital resource. d. Patents and copyrights.
Which of the following conditions is characteristic of a monopolistically competitive firm in long-run equilibrium?
a. P > demand and P = MR b. ATC > demand and MR = MC c. P > MC and demand = ATC d. P < ATC and demand > MR
Refer to the graph shown. The short-run equilibrium output level for the monopolistically competitive firm represented is:
A. 900. B. 1,000. C. 500. D. 300.
Explicit costs are
A. the opportunity costs of all resources used by the firm. B. all costs associated with the short run. C. actual expenditures that a firm must make. D. the costs associated with the resources that the firm owns.