A firm is more likely to have a natural monopoly when:
A. the size of the market is small relative to the efficient scale of the firm.
B. the size of the market is large relative to the efficient scale of the firm.
C. the firms face no or low fixed costs.
D. the government grants the firm an exclusive license to operate.
Answer: A
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Absolute advantage
a. is the same as comparative advantage b. implies autarky c. means that countries of the same size have the same opportunity cost of producing both goods d. means that a country can produce more of two goods than another country can e. means that a country can produce less of two goods than another country can
A firm can produce 840 gallons of paint per day with 6 workers, or 910 gallons per day with 7 workers. The marginal product of labor over this range of output, stated in gallons per worker per day, is
a. 140. b. 135. c. 130. d. 70.
When oligopolists secretly cooperate for their mutual benefit they are engaging in
a. inclusion b. collusion c. seclusion d. exclusion e. discrimination
A takeover implies that
a. the common shareholders buy out the bondholders b. the government takes over the corporation c. someone or a group is able to purchase all of the outstanding common stock in a corporation d. the board of directors takes control of the corporation e. a proprietorship sells out to a partnership