When a firm's average total cost curve continually declines, the firm is a
a. government-created monopoly.
b. natural monopoly.
c. revenue monopoly.
d. All of the above are correct.
b
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Halifax & Smyth (H&S) is a clothier that specializes in expensive men's suits, and the firm makes the suits from wool fabrics that are woven by one of the firm's divisions
This division is not the only source for this material, and H&S could buy or sell wool fabric in the outside competitive market. H&S will buy some of the wool fabric that it needs for suits from the outside market if the: A) market price is less than the optimal transfer price if the outside market did not exist. B) market price is less than the point where the net marginal revenue of weaving wool fabric intersects the marginal cost of wool fabric. C) market price is less than the point where the net marginal revenue of assembling men's suits intersects the marginal cost of assembly. D) Both A and B are correct.
Which of the following was an outcome of uncoordinated oil drilling in Huntington Beach, California?
a. The entire oil present underground had been extracted within few years. b. Underground oil pressure had increased due to excessive drilling leading to an oil spill into the adjacent sea. c. A majority of the oil could not be drilled out as low underground pressure prevented oil from reaching the surface. d. The oil belt suffered frequent earthquakes as excessive drilling had loosened the soil bonding.
Which of the following is provided by Supplemental Security Income (SSI)?
a. Cash support for the disabled and elderly poor b. Debit cards for the poor to purchase food c. Rent assistance for the poor and near-poor d. Food assistance for pregnant women and newborns
To be a natural monopoly, a firm must
a. control an essential natural resource input. b. be very large. c. have a continuously falling average cost curve as output rises. d. have falling average costs over a substantial range of total market demand.