Recall the Application about the merger of Sirius Satellite Radio and XM Satellite Radio to answer the following question(s).Recall the Application. After the merger of Sirius Satellite Radio and XM Satellite Radio, the new firm, Sirius XM, would be classified as a:
A. natural monopoly.
B. monopoly, but not a natural monopoly.
C. public utility.
D. duopoly.
Answer: A
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If the marginal social benefit exceeds the marginal social cost of producing the next kilowatt hour of electricity, then it is efficient to produce as many kilowatt hours as possible
Indicate whether the statement is true or false
The above figure shows the marginal benefit to a firm of polluting in the local river while producing its output, and the marginal cost to the surrounding neighbors. The marginal cost of production is zero for the firm
According to Coase's Theorem, which of the following scenarios is most likely to lead to the socially optimal level of pollution? A) The firm owns the river and there are a thousand surrounding neighbors. B) The firm owns the river and there is just one nearby neighbor. C) The river is jointly owned by one thousand surrounding neighbors. D) The firm owns the river, and therefore produces the social optimum no matter what.
The presence of large sunk costs often serves as a naturally imposed barrier to entry
a. True b. False Indicate whether the statement is true or false
Refer to the accompanying figure. Suppose the solid line shows the current demand curve for coffee. In response to an announcement that much of next year's coffee crop has been destroyed by a storm in Brazil, you should expect:
A. an increase in the quantity of coffee demanded, but no shift in the demand curve. B. neither a change in quantity demanded nor a shift in demand because next year's coffee crop will not affect the current demand for coffee. C. the demand curve to shift to D(A) in anticipation of higher future prices. D. the demand curve to shift to D(B) in anticipation of higher future prices.