Suppose that a market that is a natural monopoly has three producers providing the good to this market. This situation will
a. result in lower prices for consumers under all circumstances
b. result in higher average costs for each producer than if there were only a single producer.
c. result in all firms taking full advantage of economies of scale in the production of the good.
d. result in a more efficient outcome than the market with fewer producers.
b
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Determining the optimal choice of input combinations generally does not involve
A. substitution of one input for another. B. fixing the level of technology in the long run. C. minimizing cost, given the prices of inputs. D. assessing the productivity of various inputs.
One of the elements of monopolization is
A) having a superior product or having a superior business acumen.. B) the possession of monopoly power in the relevant market. C) when only one firm exists in an industry. D) having a significant pricing power due to an accident in the relevant market.
Total spending will equal total output
a. after inventory adjustments b. only when total leakages are equal to total injections c. by the end of every year d. only when the sum of saving and investment equals the sum of net taxes and government expenditures e. saving is equal to net taxes