Author Question: Possible benefits of a monopoly include which of the following (choose all that apply)? a. a ... (Read 32 times)

rachel9 · **on:** Jul 1, 2018

Possible benefits of a monopoly include which of the following (choose all that apply)?
a. a savings of fixed costs because only one firm supplies quantity demanded.
b. greater opportunities for research due to long-run positive economic profits.
c. government regulation is more effective because the firm is too big to fail..
d. goods and services are provided at a lower price than under perfect competition because of a monopoly's decreasing average cost curve.

Question 2

If the government requires a natural monopoly to price at marginal cost,
a. monopoly firms will earn zero economic profits because the price of the good equals the cost of producing that good.
b. monopoly firms will operate at a loss because P < AC.
c. more firms will be able to enter the market.
d. producer surplus will increase because quantity supplied is greater.