-The Firm Shown in the Figure Above Is

question 30

Multiple Choice

-The firm shown in the figure above is

• A) not a natural monopoly because it experiences diseconomies of scale where its LRAC curve intersects the demand curve.
• B) a natural monopoly because it experiences economies of scale where its LRAC curve intersects the demand curve.
• C) a natural monopoly because its marginal cost is constant, so it experiences constant returns to scale.
• D) not a natural monopoly because its LRAC curve is above its MC curve.

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Definitions:

Monetarists

Economists who believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods, as well as on inflation.

Money Supply

The overall quantity of currency and other liquid instruments circulating in an economy at a particular time.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Supply-Side Economics

An economic theory that advocates for lower taxes and deregulation to stimulate production and economic growth.