A natural monopoly:
a. is a monopoly in the production of raw materials.
b. occurs when one firm can supply the entire market more cheaply than can a number of firms.
c. is one result of a patent.
d. necessarily involves inefficient pricing.
b
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A shortage will occur whenever
A) price is below the equilibrium price. B) price is above the equilibrium price. C) price is equal to the equilibrium price. D) the supply curve is upward sloping.
Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 400 and WR = 100 and the probability of drought is 0.75. What is Brandon's expected utility?
A. 10 B. 17.5 C. 20 D. 30
If a cut in prices decreases total revenue in the short run, what will it do to total revenue in the long run? a. It will decrease total revenue in the long run
b. It will increase total revenue in the long run. c. It will leave total revenue unchanged in the long run. d. Any of the above results are possible in the long run.
Marginal utility is defined as the
a. average amount of satisfaction gained from consuming a good b. total amount of satisfaction gained from consuming a good c. additional satisfaction gained from consuming one more unit of a good d. total amount of satisfaction gained from consuming a product divided by the number of goods consumed e. total amount of satisfaction gained from consuming a good times the number of goods consumed