Economies of scale can
A) result in an increasing cost industry.
B) cause firm exits out of the industry.
C) prevent the entry of new firms into a market.
D) reduce the rate of return which the firm may earn.
Answer: C
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Higher production indifference curves correspond to larger amounts of one input in relation to a second input.
Answer the following statement true (T) or false (F)
If government regulators force a natural monopoly to produce where price equals marginal cost, the monopoly will earn
a. a "fair return" b. positive economic profit c. zero economic profit d. negative economic profit e. greater economic profit than if it were unregulated
The relationship between money and gross domestic product is shown by the equation of exchange
a. True b. False Indicate whether the statement is true or false
Which of the following is a normative economic statement?
A) The price of gasoline is too high. B) The current high price of gasoline is the result of strong worldwide demand. C) When the price of gasoline rises, the quantity of gasoline purchased falls. D) When the price of gasoline rises, transportation costs rise.