The In the News article "A Sirius Mistake? FCC Approves XM-Sirius Merger" discusses the merger of two satellite radio companies. In some industries, mergers can be economically justified if economies of scale
A. Act as a barrier to entry.
B. Increase the total cost of production.
C. Lower the average cost of production.
D. Result in more product variety.
Answer: C
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In the above figure, the monopolistically competitive firm makes an economic profit of
A) $0. B) between $0 and $50 per day. C) between $50.01 and $100 per day. D) greater than $100.01 per day.
Natural monopolies occur when a single or a few firms can take advantage of economies of scale and supply the entire industry output.
A. True B. False C. Uncertain
Consumers value the product-specific services for a new smartphone at $25 and the marginal cost to the retailers for providing the product-specific services is $20. If the retailers provide the product-specific services, which of the following is true?
A) The shift in the market demand will equal the shift in the market supply. B) The shift in the market demand will exceed the shift in the market supply. C) The shift in the market supply will be exactly double the shift in the market demand. D) The shift in the market supply will exceed the shift in the market demand.
In general, more efficient taxes have:
A. lower administrative burdens. B. more complexity. C. lower revenues given the size of the tax. D. All of these statements are true.