With a natural monopoly, the potentially insurmountable barrier to entry is the
A. low profit margins.
B. decreasing average total costs.
C. increasing average costs.
D. the absence of fixed costs.
Answer: B
You might also like to view...
An aircraft company has signed a contract to deliver a plane 3 years from now. The price they will receive at the end of 3 years is $20 million. If the firm's cost of capital is 6%, what is the present value of this payment?
What will be an ideal response?
In a monopolistically competitive market, having a large number of firms in the market means that
A) no firm attempts to take into account the reaction of rival firms. B) individual firms will have a large portion of the market giving them monopoly power. C) firms will get together and collude because this will be the only way to earn monopoly profits. D) firms will cooperate with each other to drive competitors out of the market.
Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. As a result:
A. the official unemployment rate will fall. B. the official unemployment rate will rise. C. the official unemployment rate will remain unchanged. D. the size of the labor force will increase.
Which of the following is an example of a trade restriction?
A) Japan places a tax on all Korean automobiles. B) Domestic wine is more expensive than wine imported from Chile. C) The United States, Canada, and Mexico sign the NAFTA agreement. D) Consumers prefer German beer to domestic beer.