Breaking a monopoly firm into several rival firms will be unlikely to improve economic efficiency when economies of scale are important because
a. several smaller firms will have higher per-unit costs than a single larger firm.
b. a single firm will have higher per-unit costs than several smaller firms.
c. it is harder to regulate many smaller firms than it is one large firm.
d. consumers will find it harder to choose among the products of many alternative sellers.
A
You might also like to view...
A decrease in the supply of labor will ________ real wages and ________ employment
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
You are the chairperson of the Board of Governors of the Federal Reserve. You believe in a Keynesian model of the economy, and your goal is to keep the economy at the full-employment level of output. How would you respond (tightening or easing policy) in each of the following cases?(a)Government purchases increase(b)Corporate tax rates increase(c)Expected inflation increases(d)There's a beneficial oil price shock (and the LM curve shifts more to the right than the FE line)
What will be an ideal response?