Suppose the Technology of an Industry Is Such That the Typical

question 19

Multiple Choice

Suppose the technology of an industry is such that the typical firm's minimum efficient scale is 18 units per day at an average long-run cost of $1600 per unit.If the total quantity demanded at a price of $1750 per unit is 16 units per month,the likely result would be

• A)a competitive industry.
• B)a cartel.
• C)price discrimination.
• D)a natural monopoly.
• E)a concentrated oligopoly.

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Definitions:

Stock Returns

The income generated from the investment in shares, comprised of dividends received and capital gains or losses.

Exit Price Approach

A valuation method that determines the price a seller would receive to sell an asset or transferred liability.

Transaction Costs

The expenses associated with buying or selling goods, services, or financial instruments, which may include commissions, fees, and bid-ask spreads.

Fair Value

A financial term for the estimated worth of an asset or liability, based on current market conditions.