When it takes one firm in an industry to produce the quantity necessary to realize low unit costs, the industry
A) experiences economies of scale.
B) has barriers to entry due to ownership of resources.
C) has no barrier to entry.
D) has a license granted by the government.
A
You might also like to view...
The Massachusetts Turnpike is a state toll-road where cars and trucks pay a fee in proportion to the distance they travel and the weight of the vehicle. The road was built with federal funds in the 1960s, but the state must pay for maintenance. Given what you know about regulation, what do you think the toll charge for a particular car or truck represents?
a. the average variable cost of maintenance b. the marginal cost of maintenance c. the monopoly price d. price discrimination against bus passengers e. a lump-sum tax
Which of the following is a true statement about the difference between a price-taker firm and a competitive price-searcher firm in the long run?
a. Both will sell their products at a price equal to average total cost, but only the price taker will produce at minimum average total cost. b. Both will sell their products at a price equal to average total cost, but only the competitive price searcher will produce at minimum average total cost. c. Only the price taker will sell its product at a price equal to average total cost. d. Only the competitive price searcher will sell its product at a price equal to average total cost.