If a pharmaceutical firm is researching ways to improve its heartburn medicine and discovers a technique that will improve its allergy medicine, one could conclude that economies of scope exist in that industry
Indicate whether the statement is true or false
True . Economies of scope imply that the cost of producing two goods together is less than the cost of producing them separately. In this case, the costs of producing heartburn medicine and allergy medicine are lower for the firm that produces both.
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Which of the following is a characteristic of a monopoly firm?
A) horizontal individual demand curve B) barriers to entry C) easy entry and exit D) many buyers and sellers
If in some range of production average cost is falling, the firm is experiencing
a. increasing returns to scale. b. decreasing returns to scale. c. constant returns to scale. d. increasing costs per unit of output.
Which of the following does not explain why consumers buy products that many other consumers are already buying?
A) network externalities B) the satisfaction people derive by being viewed as "fashionable" C) cost-effective way to gather information about a product D) differences in tastes and preferences
Surplus is:
A. maximized for individuals whose reservation price equals the market price. B. a measure of the value that buyers and sellers get from participating in a market C. negative for those who do not participate in a market. D. All of these are true.