What is the main structural advantage of a natural monopoly? What is the price-output combination of an unregulated natural monopoly?
What will be an ideal response?
A natural monopoly has an ATC curve that is always downward-sloping. As a result, it is able to produce total market demand at the lowest possible unit costs. It is not advantageous for the firm to increase its output above the level where MR = MC, so the price will be above and the output will be below the levels dictated by marginal cost pricing.
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According to the income approach, the largest component of national income is:
a. government spending. b. proprietor's income. c. net interest. d. personal consumption expenditures. e. compensation of employees.
Costs are related to output because
A) output is variable over the long run. B) inputs are related to output. C) some inputs are fixed. D) inputs must be paid their opportunity costs.