Natural monopolies enjoy strong economies of scale, and so as output increases:
A. average costs are continually falling.
B. average costs are continually rising.
C. marginal costs are continually rising.
D. marginal revenue is continually falling.
Answer: A
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. In a deposit-refund system, the deposit makes the polluter internalize the externality by absorbing the cost of any damage it might generate in advance. 2. To effectively internalize the externality, the deposit component of a deposit-refund system must raise the MPC of illegal waste disposal by the MECmeasured at the competitive output level. 3. Suppose that Firm 1 and Firm 2 face marginal abatement costs of MAC1 = 2.5A1 and MAC2 = 1.5A2, respectively, and that tradeable permits for pollution are issued such that a total of 20 units must be abated. If firm 1 abates 7.5 units, and firm 2 abates 12.5 units, then both firms have an incentive to trade. 4. If Firm X is abating 9 units with an MACX = 0.6AX, and Firm Y is abating 11 units with an MACY = 0.9AY, then Firm Y should do less of the abating and Firm X should do more in order to lower the overall costs of abatement.
Between 1988 and 1989, the price of retail space in Ginza, Tokyo's premier commercial and entertainment center, rose from $400 to $625 per square foot. This was the result of an increase in demand in the face of a perfectly inelastic supply curve for retail space. Economists call this
a. monopoly profit. b. economic rent. c. usury. d. marginal revenue product.
Capital is a(n) ____ variable and investment is a ____ variable.
A. physical; financial B. stock; flow C. asset; liability D. flow; stock
Government's ability to reduce private-sector economic risks through laws and regulations would encourage all of the following, except:
A. Higher levels of private economic investment B. Formation of new businesses C. Introduction of new products and processes D. Reduction of private goods and services