Natural monopolies are mostly regulated industries because otherwise too many firms would enter the market and price would be driven too low for any firm to offer goods for a profit.
Answer the following statement true (T) or false (F)
False
Natural monopolies are regulated because it is more efficient for one firm to offer the goods because of strong economies of scale. Still, if the firm were not regulated, the monopoly would charge a price that is higher than marginal cost.
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For most products, purchases tend to fall with decreases in consumers' incomes. Such products are known as
A. average goods. B. inferior goods. C. direct goods. D. normal goods.
Which of the following was NOT a part of Chandler's (1977) description of the rise of big business in the 19th century?
(a) Vertical integration of firms (b) The development of mass production (c) The development of mass distribution (d) The use of central planning to improve production techniques
If long run average costs fall with output, you have
a. Increasing returns to scale b. Decreasing returns to scale c. Constant returns to scale d. None of the above
In general, a higher-than-anticipated inflation rate
a. helps everyone b. hurts everyone c. helps creditors and harms debtors d. helps debtors and harms creditors e. helps sellers