In a constant cost industry,
a. a natural monopoly is likely to occur.
b. total cost is the same, no matter how much a firm produces.
c. the long-run supply curve will be perfectly elastic.
d. entry of new firms in the industry will lead to a reduction in the cost of inputs.
C
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The textbook cautions against speaking of "the people" as wanting a particular good
A) because it is not clear in what sense groups as distinct from individuals can ever have wants. B) because people rarely know what they themselves really want. C) because the wants of the people are relevant only in a democracy. D) because assertions about "the people" confuse economics with politics. E) unless the majority has clearly voted for it.
As the housing market took off in the early 2000s:
A. household debt became positive for the first time since the Great Depression. B. the growth in household debt slowed. C. the growth in household debt accelerated. D. household debt became negative for the first time since the Great Depression.
Explain the importance of the shape of supply curve for undertaking stabilization policies
When two countries specialize and trade:
A. they can have consumption possibilities beyond their production possibilities. B. surplus can be gained by both countries. C. both can enjoy more output than either could produce on its own. D. All of these are true.