When a natural monopoly exists in an industry, which statement will be true?
a. The per-unit costs of production will be lowest when there are numerous producers in the industry.
b. The per-unit costs of production will be lower for the smaller firms than for the larger firms.
c. The per-unit costs of production will be minimized at the output that maximizes the industry's profitability.
d. The per-unit costs of production will be lowest when a single firm generates the entire output of the industry.
d. The per-unit costs of production will be lowest when a single firm generates the entire output of the industry.
When a natural monopoly exists, the per-unit costs of production will be lowest when a single firm generates the entire output of the industry.
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A firm has MR = $70 and MC = $20 + Q. Fixed costs are $175.
(a) If the firm is currently producing 30 units, what are its marginal cost and marginal revenue at the current output level? (b) Is the firm maximizing profits? If so, how can you tell? If not, what can the firm do to increase profits?
Consumer surplus can be defined as the difference between:
a) the demand curve and the price of the good. b) the supply curve and the price of the good. c) the supply curve and the demand curve. d) the price charged by sellers and the price paid by buyers.
The classical economists' contention that prices double when the money supply doubles is predicated on the belief that in the short run velocity is ________ and real GDP is ________
A) constant; constant B) constant; variable C) variable; variable D) variable; constant
The marginal product of capital indicates ________. Therefore the MPK curve is also ________
A) the quantity of capital supplied for a given rental price; the equilibrium price of capital B) the quantity of capital demanded for a given rental price; the demand curve of capital C) the quantity of capital demanded for a given rental price; the equilibrium price of capital D) the quantity of capital supplied for a given rental price; the supply curve of capital E) none of the above