Author Question: A firm is a natural monopoly if ________. A. it can produce the good at a price below its ... (Read 120 times)

bobbie

  • Hero Member
  • *****
  • Posts: 592
A firm is a natural monopoly if ________.
 
  A. it can produce the good at a price below its competitor's price
  B. it can produce a larger quantity of the good than other firms could
  C. the government grants it a public franchise or patent
  D. it can satisfy the market demand at a lower average total cost than other firms can

Question 2

Using Figure 10.2 determine the number of workers that a representative firm would wish to hire. Explain your answer.
 
  What will be an ideal response?



momolu

  • Sr. Member
  • ****
  • Posts: 320
Answer to Question 1

D Answer D is the definition of a natural monopoly.

Answer to Question 2

A competitive firm using only one variable factor of production will use that factor as long as its marginal revenue product exceeds its unit cost. A perfectly competitive firm will hire labor as long as MRPL is greater than the going wage, W. The hypothetical firm will demand 2100 units of labor.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

Did you know?

A serious new warning has been established for pregnant women against taking ACE inhibitors during pregnancy. In the study, the risk of major birth defects in children whose mothers took ACE inhibitors during the first trimester was nearly three times higher than in children whose mothers didn't take ACE inhibitors. Physicians can prescribe alternative medications for pregnant women who have symptoms of high blood pressure.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

The first-known contraceptive was crocodile dung, used in Egypt in 2000 BC. Condoms were also reportedly used, made of animal bladders or intestines.

For a complete list of videos, visit our video library