For a Natural Monopoly to Exist

question 219

Multiple Choice

For a natural monopoly to exist,

• A)a firm must continually buy up its rivals.
• B)a firm's long-run average cost curve must exhibit diseconomies of scale beyond the economically efficient output level.
• C)a firm's long-run average cost curve must exhibit economies of scale throughout the relevant range of market demand.
• D)a firm must have a government-imposed barrier.

Understand the basic concepts and processes of visual perception.

Differentiate between various types of visual illusions and their causes.

Explain sensory adaptation and its effects on perception.

Describe the role of perceptual constancies in object recognition.

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Definitions:

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, leading to competition based on price, quality, and marketing.

Marginal Decision Rule

A principle stating that actions should be taken if marginal benefits exceed marginal costs.

MC = MR

A condition where a firm's marginal cost equals its marginal revenue, often used to determine the optimal level of output and price in perfect competition.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on factors other than price.