A natural oligopoly can form
A) if there are economies of scale.
B) only if firms sell a differentiated good.
C) only if firms sell a homogeneous good.
D) if there is only one firm in the industry.
A
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Which of the following could explain a fall over time in the price of the depletable resource aloe?
a. The productivity of aloe mines fell. b. New deposits of aloe were discovered. c. Demand for aloe increased over time. d. All of the above are correct.
Which of the following is a TRUE statement about monopoly and perfect competition?
A) Price is always higher and output higher under monopoly than under perfect competition. B) Because costs do not depend on market structure, price is usually higher and output is always lower under monopoly than perfect competition. C) If there are substantial economies of scale, price may be lower and output greater under monopoly than under perfect competition. D) If there are substantial economies of scale, price may be lower and output greater under monopoly than under perfect competition, and price may be below marginal cost instead of equal to marginal cost.
When the Fed buys U.S. government securities, the money supply
A. increases because there is an increase in transaction deposits at the bank of the bond dealer but there is no decrease in transaction deposits at any other bank. B. remains unchanged because the increase in transaction deposits at the bond dealer's bank is offset by a reduction in transaction deposits at the Fed. C. decreases because there is an increase in the reserves of the bond dealer's bank. D. remains unchanged because the increase in transaction deposits at the bond dealer's bank is offset by a fall in transaction deposits at another bank.