One Way to Take Advantage of Economies of Scale and to Avoid

question 223

Multiple Choice

One way to take advantage of economies of scale and to avoid the market power of a natural monopoly in the short run is through:

• A) price control.
• B) privatizing the monopoly.
• C) breaking up the monopoly into several smaller companies.
• D) penalty.

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Definitions:

Administrative Facilities

Facilities and resources provided to support the management and day-to-day operations of an organization.

Utilities

Services such as water, electricity, gas, and sewer provided to consumers and businesses.

Primary Material

The main raw materials used in the production of goods or services, often a critical component in manufacturing processes.

Indirect Labor

Labor costs not directly tied to the production of goods or services, such as salary of supervisory staff.