Which of the following is characteristic of a regulated natural monopoly?
A. Extensive economies of scale.
B. The wasteful duplication of capital facilities in the event of competition.
C. The provision of an essential service.
D. All of these.
Answer: D
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The market demand curve in a perfectly competitive market is ________ and the demand curve for a perfectly competitive firm's output is ________
A) downward sloping; downward sloping B) downward sloping; horizontal C) horizontal; downward sloping D) horizontal; horizontal E) downward sloping; upward sloping
Supply curves usually slope upward because producers face increasing opportunity costs when increasing output
a. True b. False
Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
a. negative, and the good is an inferior good. b. negative, and the good is a normal good. c. positive, and the good is a normal good. d. positive, and the good is an inferior good.
(a) Find the total profit or total loss of the firm shown in the graph below. (b) Is the firm in short run or long run? (c) How much is the firm's most efficient output? (d) What is the lowest price the firm would accept in the long run?
