If a firm is a natural monopoly, its
a. long-run average cost declines over the full range of market demand
b. long-run average cost increases over the full range of market demand
c. fixed cost declines over the full range of market demand
d. fixed cost increases over the full range of market demand
e. long-run average cost declines and marginal cost rises over the full range of market demand
Question 2
By paying a higher-than-market wage, a firm can avoid the problem of
a. reputation as hostage
b. moral hazard
c. the winner's curse
d. adverse selection
e. symmetrical information
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