1.) An industry is said to be a natural monopoly when: A. legal barriers limit entry...
1.) An industry is said to be a natural monopoly when:
A. legal barriers limit entry into the market.
B. economies of scale are present in the market.
C. the market demand for the product supplied by a firm is inelastic.
D. long-run average cost continues to increase as the quantity of output increases.
2.) A monopoly:
A. can increase price and increase output at the same time.
B. can charge any price it wants and still sell all of its output.
C. can sell any output it produces provided it accepts the market price.
D. must lower price in order to increase output.
E. faces a perfectly elastic demand curve.
Homework Answers
Ans1) the correct option is B. economies of scale are present in the market.
Economies of scale says long run average cost declines as more output is produced.
Ans2) the correct option is D. must lower price in order to increase output.
Add Answer to:
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