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Economics
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A natural monopoly is defined as an industry in which:

a)  one firm can produce the entire industry output at a lower average cost than a larger number of firms could.

b)  a single firm controls crucial inputs to the production process.

c)  a single seller exists as a result of patent protection.

d)  a single firm exists because the government owns and operates the monopoly.

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Joshua Stredder
Joshua StredderLv10
16 Oct 2020
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Related questions

When a natural monopoly exists in a given industry, the per-unit costs of production will be

 

a) lowest when there are a large number of producers in the industry.

b) lower for smaller firms than for larger firms.

c) minimized at the output that maximizes the industry's profitability.

d) lowest when a single firm generates the entire output of the industry

A natural monopoly is a market where:

A) a single firm has control over a vital natural resource.

B) many smaller firms can produce the entire market output at the same per-unit cost as could one large firm.

C) a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms.

D) many smaller firms can produce the entire market output at a lower per-unit cost than could one large firm.

1) A natural monopoly exists when:

a. A few firms collude to make one large firm

b. Firms enter the industry as a result of profit incentives

c. Economies of scale provide large cost advantages to having one firm produce the industry's output

d. Firms naturally maximize regardless of market structure

 

2) A(n) ____ is a single firm with ___, whereas a(n) ___ implies an industry with ____ firm(s) and ____ .

a. Monopoly; barriers to entry; oligopoly; few; no barriers to entry

b. Oligopoly; no barriers to entry; monopoly; many; easy entry and exit

c. Monopoly; barriers to entry; monopolistic competition; many; easy entry and exit

d. Monopolistic competitor; barriers to entry; monopoly; one; barriers to entry

 

3) In monopolistic competition:

a. Each firm produces a product identical to that of every other firm in the industry

b. Firms are aware of their strategic interdependence

c. Firms earn large economic profits in the long run

d. Firms earn zero economic profits in the long run

 

4) A monopolistically competitive industry, such as corn snack chips, and a perfectly competitive industry, like wheat farming, are alike in that:

a. There are many firms in each industry

b. Firms in both types of industries produce similar but not identical products

c. Barriers to entry in both industries are large

d. Firms in both types of industries produce identical products

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