What gives rise to a natural monopoly? How do consumers benefit from a natural monopoly?
What will be an ideal response?
A natural monopoly arises when the production function exhibits economies of scale over the relevant range of market demand. The average cost of production is lower as the output produced increases. Consumers benefit from having one supplier because the supplier will be able to pass some of the cost savings to consumers.
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In the above figure, the x-coordinate of point b is
A) 1. B) 2. C) 3. D) 14.
The price controls on consumer goods during World War II led to
a. permanent surpluses. b. stable long-term prices. c. a burst of inflation when they were ended. d. increased production of consumer goods to satisfy demand.
A "near money" is an asset that can be
a. indistinguishable from commodity money. b. spent easily. c. a close substitute for money. d. only issued by a bank.
To economists, games are:
A. situations in which individuals act against their own interest for fun. B. any situation in which players pursue strategies designed to achieve their goals. C. just recreational pursuits like chess, Monopoly, or poker. D. None of these statements are true.