A natural monopoly usually arises when
A) there are diseconomies of scale in an industry.
B) the government allows unrestricted access to a market.
C) there are large economies of scale relative to the industry's demand.
D) companies band together to form a larger company.
Answer: C
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Suppose the following situation exists for an economy: Kt+1/N = Kt/N. Given this information, we know with certainty that
A) the economy is operating at the golden rule equilibrium in period t. B) saving per worker is less than depreciation per worker in period t. C) saving per worker is greater than depreciation per worker in period t. D) investment per worker equals depreciation per worker in period t.
Which of the following is an assumption made about a competitive labor market?
a. A firm must offer a higher wage rate to attract more labor. b. A firm must offer a lower wage rate to attract more labor. c. A firm cannot influence the market wage rate. d. The labor supply curve facing each firm is inelastic. e. Workers compete for jobs and firms pay a variety of wage rates.