Suppose That All Pizza Companies Have the Same Costs and the Minimum

question 180

Multiple Choice

Suppose that all pizza companies have the same costs and the minimum average total cost is $12 per pizza. The pizza companies have an efficient scale of 100 pies per night. In the small town of Coatsville, at the price of $12 per pizza the quantity demanded is approximately 300 pizzas per night. This market, therefore, can best be characterized as

• A) perfectly competitive.
• B) a natural monopoly.
• C) a natural duopoly.
• D) a natural oligopoly.

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