Markets that exhibit economies of scale over the entire range of market output
A. Are perfectly competitive.
B. Have upward-sloping long-run average total cost curves.
C. Are natural monopolies.
D. Have downward-sloping short-run average total cost curves.
Answer: C
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Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. CustomerReservation Price($/Rental)A22B16C12D8E6F4Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes can charge a different price in the morning and in the afternoon, then in the afternoon, it will rent out ________ bike(s) and charge ________ per bike.
A. 3; $4 B. 5; $10 C. 1; $8 D. 2; $6
Shares of stock are:
A. claims to partial ownership of a firm. B. regular payments made to owners of a firm. C. legal promises to make regular payments to the stockholder. D. legal promises to repay a debt.
Which of the following is NOT a true statement regarding free trade?
A) Free trade promotes specialization and efficient production. B) Free trade generally reduces the domestic prices of imports. C) Free trade may stimulate economic growth through export sales. D) Every individual in a country gains short-term benefits from free trade.
A network effect arises whenever
A) firms in an oligopolistic industry engage in limit pricing. B) firms in an oligopolistic industry engage in a zero-sum game. C) a consumer's willingness to purchase a good or service is influenced by how many others also buy or have bought the item. D) a producer's willingness to produce a good or service is influenced by how many other firms also produce or have produced the item.