Markets that are best served by a natural monopoly are markets were the cost structure of production is dominated by _____. Select one: a. low variable cost b. high average variable cost c. low fixed cost d. high fixed cost
Answer
Option d
high fixed costs
the natural monopoly have a downward sloping average total cost curve as the fixed costs are very high so the average total cost curve is decreasing for the firm for the whole market demand.
Markets that are best served by a natural monopoly are markets were the cost structure of...
Natural monopoly Select one: a. does not compete with small competitive producers of the same good b. is a monopoly in the market for natural resources c. emerges when average total cost is minimized if only one firm produces the good d. is inefficient since it total costs are not minimized
Given the following diagranm Monopoly IGRAPH Regular Monopoly Natural Monopoly Off Off Show Deadweight Loss Show Economic Profit/Loss ($) Price, Average/Marginal Cost 225 200 175 150 125-- 100 ATC MC-AVC 75 50 25 MR 0 20 4060 80 100 120 140 160 180 Quantity (units per month) PROFIT CALCULATIONS SETTINGS Reset $125.00 Market Price (Pmkt) Cost Structure LoeMarginal Revenue (MR) High Cost $50.00 Cost $95.00 Marginal Cost (MC) Quantity $7,500.00 $8,100.00 ($600.00) Revenue 120 40 Costs Quantity 60 Profit Instructions:...
Unanswered Natural Monopoly Which of the following is NOT true? A natural monopoly occurs whenever the average costs are declining. B A natural monopoly dissuades entry by increasing its price. C A natural monopoly firm has cost advantage over potential firms Unanswered
4. For a monopoly firm, marginal revenue (MR) is price (greater/less) than 5. To maximize profits, a monopoly firm picks the quantity at which revenue average revenue) equals {marginal cost/average cost) (marginal (Game Theory/Consumer Theory) is a method for analyzing strategic behavior of oligopoly firms 7. The entry of the second firm under monopolistic competition structure of market shifts the demand curve of the first firm to the (right left). D Focus ch De 9 W 11. Firms in a...
A “natural monopoly” is the result of a. Government regulation b. Constant average cost c. Decreasing average cost d. Increasing average cost
The reason to regulate a natural monopoly is that a natural monopoly ______________ produce an economically efficient amount of output, ______________ charge a higher price than the perfectly competitive industry, and ______________ have lower average costs than a perfectly competitive industry. A Will not; may; will B Will; will; will C Will not; will not; will not D Will not; will; will E Will; will not; may
Hi, i need help with this question 1. The city's Water and Sewer provider is a regulated natural monopoly that has a cost function, C(Q,N) 1,000 +4N+3Q, where N is the number of households, and Q is the cubic inches of water consumed per day. There are 50 high type consumers each with demand, and 30 low type consumers with demand, Each q is cubic inches consumed per household per day. Start with the assumption that the monopolist is profit...
Which of the following best ts the description of a natural monopoly? a) The US government has granted the Post O�ce a monopoly on the delivery of �rst class mail. 9. b)Prior to the 1940's, Alcoa had a monopoly because it controlled all of the US bauxite mines. c)Until 2016, AstroZeneca had a patent on Celestra, a cholesterol medication. d)Tap water service has a monopoly since economies of scale make it impractical for multiple companies to place water pipes.
When a firm has a natural monopoly, the firm's a. marginal cost curve must lie above the firm’s average total cost curve. b. marginal cost always exceeds its average total cost. c. average total cost curve is downward sloping. d. total cost curve is horizontal.
Identify each firm with its proper market structure. a) A wheat farmer Monopolistic competition Natural monopoly Oligopoly Pure competition b) Ford Motor Company Oligopoly Natural monopoly Monopolistic competition Pure competition c) Bird's Eye Peas Oligopoly Natural monopoly Monopolistic competition Pure competition d) Microsoft Windows operating system Oligopoly Pure competition Monopolistic competition Natural monopoly