If a Monopolist's Production Process Has Economies of Scale and Average

question 67

Multiple Choice

If a monopolist's production process has economies of scale and average cost exceeds marginal cost, then

• A)the government could set price equal to marginal cost and subsidize the monopoly.
• B)the government should not offer a subsidy, since the monopoly can make a profit setting price equal to marginal costs.
• C)if the government sets price equal to average cost, the monopoly will go out of business.
• D)the government cannot regulate price.

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Definitions:

Relative Age

The age of a fossil, organism, rock, geologic feature, or event as defined relative to other geologic features or events.

Absolute Age

A measure of the exact age of a rock, fossil, or other object in years, often obtained through radiometric dating techniques.

Numerical Age

The age of a geological feature or event expressed in years or other units of time, often determined by radiometric dating methods.

Radiometric Age

The determination of the age of a mineral, rock, or archaeological artifact based on the decay rate of radioactive isotopes.