The source of monopoly power for a firm with economies of scale occurs when:
a. an inventor gets the exclusive right to produce a product for 20 years.
b. government awards a firm exclusive right to supply a particular product.
c. a firm has exclusive control over a resource critical to production.
d. a single firm can supply market demand at a lower average cost per unit than two or more firms each producing less.
d
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Refer to Figure 12-17. Which of the following statements is true?
A) The current market price is $3 but the firm will be able to increase the price in the future. B) The current market price is $3 but the price will fall in the long run as new firms enter the market. C) The current market price is $3 but the price will increase in the future as the market demand increases. D) The current market price is $3 but the price will fall in the long run as a result of a decrease in demand.
The demand for a productive resource is said to be "derived" because the demand for the factor:
A. Depends on the demand for the product it helps to produce B. Depends on the demand for a complementary factor C. Is derived from the state of the economy D. Is derived from government policy