If a Firm Has a Downward-Sloping Long-Run Average Cost Curve

question 11

Multiple Choice

If a firm has a downward-sloping long-run average cost curve over the entire range of market demand, it is a

• A)local monopoly
• B)resource monopoly
• C)monopsony
• D)output monopoly
• E)natural monopoly

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Definitions:

Cross-price Elasticity

A measure of how the quantity demanded of one good responds to a change in price of another good, indicating the degree of substitutability or complementarity between the two goods.

Good W

A hypothetical product or service used in economic examples or theories to discuss various economic principles.

Good Y

Typically used in economic models, it represents a generic secondary good in contrast to another good, often labeled as Good X.

Rationing Device

A mechanism used to distribute scarce goods and services among competing uses or users.