When economists say a market has "barriers to entry," they refer to:
A. monopolists being prohibited from selling their products to certain customers.
B. a policy that some countries establish to reduce imports from other countries.
C. factors that prevent other firms from challenging a firm with market power.
D. economic profits that are positive, but too high to encourage entry.
Answer: C
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Consider a Wal-Mart supercenter and a 7-Eleven store. In the long run,
A) Wal-Mart or 7-Eleven may have economies of scale depending on how many customers are served. B) Wal-Mart will definitely have lower average costs because supercenters serve many more customers. C) The 7-Eleven store will definitely have lower average costs because their small stores are cheaper to build. D) Wal-Mart's average total cost will decline faster than the 7-Eleven store and experience diseconomies of scale. E) The 7-Eleven store's average total cost will be lower than Wal-Mart's and always experience economies of scale.
Comment on the following statement: "In order for a natural monopoly to be present, economies of scale must be realized at a scale that is close to total demand in the market."
What will be an ideal response?
When the marginal utility derived from a good is negative, total utility is _____
a. increasing b. at a minimum c. equal to zero d. decreasing e. at a maximum
Economists believe that only a small part of human behavior can be explained and predicted by assuming that most people act as if they are motivated by their own self-interest in an effort to increase their expected personal satisfaction
a. True b. False Indicate whether the statement is true or false