If a firm is a natural monopoly, society will benefit if it is broken into several small companies.
Answer the following statement true (T) or false (F)
False
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Critics of advertising argue that advertising by its very nature imposes a cost on society. Explain what these costs are
What will be an ideal response?
The least-cost way of producing a particular rate of output is represented by a point of tangency between a short-run average cost curve and the
a. total cost curve b. short-run average total cost curve c. average variable cost curve d. long-run average cost curve e. marginal cost curve
Joe did not receive a raise this year, so his income remains the same as last year. Meanwhile, the cost of his favorite games has gone up. If Joe’s actions are based on the income effect, which of the following is most likely to happen?
a. Joe will devote a larger percentage of his income to games. b. Joe will buy fewer games. c. Joe will buy different games that cost less. d. Joe will calculate the utility of playing games.
Which of the following is true under natural monopoly?
A. The marginal cost curve will be above the average cost curve. B. The monopolist will set price equal to marginal cost and will earn economic profits. C. Economies of scale exist. D. Output is produced under conditions of constant cost.