Jimmy's Bakery has an absolute advantage in producing bagels. Which of the following is true of the bakery?
a. It produces bagels at a lower opportunity cost than other bakeries
b. It uses more inputs in the production of bagels than other bakeries.
c. It is able to produce bagels at a lower production cost than other bakeries.
d. It experiences diseconomies of scale in the production of bagels.
c
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If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then the firm's economic profit will be
A) $9 million. B) $12 million. C) $0, that is, the firm's owners make only a normal profit. D) negative, that is, the firm incurs an economic loss.
At a product's equilibrium price
A) anyone who needs the product will be able to buy the product, regardless of ability to pay. B) not all sellers who are willing to accept the price will find buyers for their products. C) the federal government will provide the product to anyone who cannot afford it. D) any buyer who is willing and able to pay the price will find a seller for the product.