Which of the following is true about this firm?
A. Society can benefit from government regulation using marginal cost pricing without a subsidy.
B. It is a natural monopoly.
C. Marginal cost pricing will assure technical efficiency.
D. Profit regulation will assure allocative efficiency.
Answer: A
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The above table shows the total product schedule for Hair Today, a hair styling salon. Based on the table, the marginal product for Hair Today
A) never reaches a maximum. B) decreases after the 1st worker. C) reaches a maximum with the 4th worker. D) reaches a maximum with the 3rd worker. E) reaches a maximum with the 5th worker.
If the market price is $40 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
A) $8. B) $20. C) $40. D) $200.
The manager of Steel Works learns of a new technological interdependency between the intermediate stage and the final stage of production. If Steel Works currently contracts with another firm for the intermediate stage of production, which of the following is true?
A) The manager has less of an incentive to integrate backward. B) The manager has more of an incentive to integrate backward. C) The manager has more of an incentive to integrate forward. D) The manager has less of an incentive to integrate forward.
A characteristic of outsourcing is
a. completely unrelated to vertical integration b. likely to be profitable exactly when vertical integration is profitable c. can allow a firm to focus on its core competencies d. it prevents the exploitation of differing degrees of economies of scale at different points in the supply chain