Question

please check my answers (2)

As a natural monopoly production, its constantly falls throughout the range of demand Ouest5 Not yet anvwered Points out of 1.00 P Flag question Select one: A decreases marginal cost B. decreases: long-run average cost • Cincreases: long run average cost Dncreases: sunk cost Monopolistically competitive firms have some market power because Ost 6 Not yet answered Points out of 1.00 Flag question Select one: A each firm cannot set their own price B. there are perfect substitutes for each firm's product • Ceach firm produces a differentiated product D. there are no barriers to entry

Answer 1

(5) (C)

Natural monopoly arises from economies of scale which means LRAC keeps decreasing with increase in output.

(6) (C)

Product differentiation is the source of market power.

(7) (A)

A merger increases market concentration and market power, while perfect competition means no firm has any market power.

(8) (C)

For a cartel, profit is maximized when Market MR = Market MC.