If a severe natural disaster reduced the population of a city, one would expect a natural monopoly to:
A. lower prices.
B. split into two firms.
C. merge with a competitor.
D. experience an increase in average costs.
Answer: D
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A person with a diminishing marginal utility of income
A) will be risk averse. B) will be risk neutral. C) will be risk loving. D) cannot decide without more information
An implicit contract refers to an understanding that the employer will try to keep wages from falling when the economy is weak or the business is having trouble, and the employee will not expect huge wage increases when the economy or the business is strong
a. True b. False Indicate whether the statement is true or false
The ________ is the rule of thumb according to which people's belief about the likelihood that something belongs to a given category increases with the extent to which it shares characteristics with the stereotypical members of that category.
A. Weber-Fechner law B. availability heuristic C. representative heuristic D. adaptive rationality standard
Suppose Ariana deposits $75,000 in her bank. If the reserve ratio is 20 percent, this will lead to a maximum increase of ________ in checking account balances throughout all banks.
A. $15,000 B. $375,000 C. $750,000 D. $1,500,000