Breaking a monopoly firm into several rival firms will be unlikely to improve economic efficiency when economies of scale are important because
a. several smaller firms will have higher per-unit costs than a single larger firm.
b. a single firm will have higher per-unit costs than several smaller firms.
c. it is harder to regulate many smaller firms than it is one large firm.
d. consumers will find it harder to choose among the products of many alternative sellers.
A
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Suppose milk and chocolate syrup are complements (mixed together they make chocolate milk). If the price of milk increased by exactly 25%, the economic way of thinking suggests
A) the demand for milk would decrease. B) the demand for chocolate syrup would decrease. C) the demand for milk would decrease by exactly 25%. D) the demand for chocolate syrup would decrease by exactly 25%.
Constellation Brands Inc is the world's biggest wine firm with 300-plus brands, from jug wines to coveted California reds, including the Clos du Bois, Geyser Peak and Woodbridge by Robert Mondavi labels
Based on this characteristic of firms, why would Constellation be more efficient than a market at coordinating economic activity? A) Constellation has economies of scope. B) Constellation has lower transaction costs. C) Constellation has economies of scale. D) Constellation has economies of team production.
In the classical model, a falling demand for labor will
a. not cause unemployment because the labor market always clears b. cause a recession with lower employment and a lower real wage c. cause a recession with lower employment and an increasing real wage d. cause a recession with lower unemployment and a lower real wage e. cause a recession with higher employment and an increasing real wage
In 2007, combined spending on public assistance by all three levels of government was approximately
a. $10 billion b. $265 billion c. $500 billion d. $1 trillion e. $10 trillion