In the electric guitar market, the quantity demanded is significantly greater than the quantity found at the bottom of the LRAC. Given this information, which of the following will likely occur?
a. Multiple firms will compete in the electric guitar market.
b. One firm will manufacture and sell electric guitars.
c. Most electric guitar firms will experience diseconomies of scale.
d. A monopoly will form in the electric guitar industry.
a. Multiple firms will compete in the electric guitar market.
If the quantity demanded in the market of a certain product is much greater than the quantity found at the bottom of the long-run average cost curve, where the cost of production is lowest, the market will have many firms competing.
You might also like to view...
A perfectly competitive firm is definitely making an economic profit when
A) MR < MC. B) P > ATC. C) P < ATC. D) P > AVC.
In the case of an external benefit generated by an activity, such as education, a private subsidy for that activity can achieve an efficient outcome
Indicate whether the statement is true or false