If the Economies of Scale Are Large Enough, Average Cost

question 109

Multiple Choice

If the economies of scale are large enough, average cost for anatural monopoly can be:

• A)higher than the average cost under competition.
• B)lower than the average cost under competition.(True Answer )Correct
• C)higher than the price of the natural monopoly.
• D)higher than the price under competition.

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Definitions:

Significant

In a statistical context, denotes results that are unlikely to have occurred by chance, indicating a meaningful difference or relationship.

Type I Errors

False positive conclusions in statistical hypothesis testing, erroneously indicating that a novel effect exists.

Type II Errors

Occurs in hypothesis testing when the null hypothesis is falsely accepted, meaning that a real effect or difference is missed.

Sampling Distributions

The probability distribution of a statistic obtained from a large number of samples drawn from a specific population.