Figure 5-4
Refer to . The figure illustrates an industry that generates
a.
external benefits.
b.
external costs.
c.
no externalities.
d.
economies of scale.
b
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The law of diminishing marginal returns states that
a. long-run average cost declines as output increases b. if the marginal product is above the average product, the average will rise c. as units of a variable input are added to a given amount of fixed inputs, the marginal product of the variable input eventually diminishes d. as a person consumes more of a good, the marginal satisfaction from that good eventually diminishes e. if marginal product is positive, total product rises
For a monopolist, marginal revenue is always
a. below market price b. equal to market price c. greater than market price d. equal to total revenue e. equal to total cost