According to the New Classical Theory,why May Output Differ from Its

question 1

Essay

According to the new classical theory,why may output differ from its full-employment level in the short run?

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Definitions:

Natural Monopolies

Industries where a single firm can supply a product or service at a lower cost than any potential competitor, often due to economies of scale.

Deregulate

The process of removing or reducing government regulations or restrictions in an industry to allow for more freedom and competition.

Natural Monopoly

An industry in which economies of scale are so great that a single firm can produce the industry’s product at a lower average total cost than would be possible if more than one firm produced the product.

Horizontal Market

A market that appeals to a wide range of consumers across different industries or sectors.