Assume That the Minimum Efficient Scale for a Typical Firm

question 24

Multiple Choice

Assume that the minimum efficient scale for a typical firm in an industry is 2 million units. The estimated output for the whole industry is 6 million units. Therefore, one can conclude that:

• A) the industry is a natural monopoly.
• B) the output produced in the industry is less than the perfectly competitive output.
• C) the industry experiences increasing returns to scale.
• D) the industry is likely to support 3 firms, each producing at minimum efficient scale.
• E) the price in the industry is higher than the perfectly competitive price.

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Definitions:

Phonemes

The basic units of sound in a language that distinguish one word from another; for example, the difference between the consonant sounds in "pat" and "bat."

Receptive Language

The ability to understand or comprehend language heard or read, an essential aspect of language development.

Productive Language

The ability to produce language forms, including speaking and writing, which is crucial for effective communication.

Telegraphic Speech

A stage in language acquisition where young children communicate using simple, two-word sentences, focusing on essential words while omitting smaller ones.