If a firm in an industry experiences very high fixed costs and constant marginal cost, it is a good candidate for a natural monopoly
Indicate whether the statement is true or false
True . Average cost will fall because average fixed costs decline and marginal cost stay constant. Two or more similar firms would have higher cost.
You might also like to view...
Inflation decreases the growth of capital because
i. when the after-tax real interest rate falls, savings decreases. ii. velocity increases when inflation increases. iii. the higher the inflation rate, the higher is the true income tax rate on income from capital. A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
From 8 to 11
A) going to the symphony and the basketball game. B) going to the symphony. C) going to the basketball game. D) three hours of time.
A temporary increase in government purchases would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy
A) lower; increase B) lower; decrease C) raise; increase D) raise; decrease
In a monopolistically competitive market, the seller maximizes profits by
A. setting P = ATC. B. setting price where P = MC. C. setting MC = ATC. D. setting price where MR = MC.