We are using resources efficiently if we can produce more of one ...

[altibaby]

We are using resources efficiently if we can produce more of one good without producing less of some other good that we value more highly.
 
  Indicate whether the statement is true or false

Question 2

What is a natural oligopoly? How does it arise? Give an example.
 
  What will be an ideal response?

[ryrychapman11]

Answer to Question 1

FALSE

Answer to Question 2

A natural oligopoly is an industry in which a small number of large firms can supply the entire market at a lower price than could a larger number of smaller firms. Natural oligopoly arises when economies of scale and limited market demand create natural barriers to entry. For example, suppose the minimum efficient scale for a taxi company is 30 rides per day and the ATC at this level of output is 10 per ride. If the quantity of taxi rides demanded at 10 is 60 rides per day, there is only room in the market for two taxi companies. With more taxi companies, either the price would have to fall below 10 per ride or the ATC would have to rise above 10 per ride. In both cases the firms would incur an economic loss and would exit until only two firms are left.