Tax Incidence
What will be an ideal response?
The division of the burden of a tax between buyers and sellers
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Antitrust action restructures a previously monopolized industry into a competitive industry. If economies of scale are unimportant in the industry, the expected result of this movement from monopoly to competition is
a. a reduction in output and an increase in price in the industry. b. a reduction in both price and output in the industry. c. an increase in both price and output in the industry. d. an increase in output and a reduction in price in the industry.
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.