An Industry Is Characterized by Scale Economies and Exists in Two

question 28

Multiple Choice

An industry is characterized by scale economies and exists in two countries.In order for consumers of its products to enjoy both lower prices and more variety of choice

• A) the two countries must engage in international trade with each other.
• B) each country's marginal cost must equal that of the other country.
• C) the marginal cost of this industry must equal marginal revenue in the other.
• D) the monopoly must lower prices in order to sell more.
• E) they must combine to become a multinational corporation.

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Definitions:

Rosenthal Effect

Also known as the Pygmalion effect, the phenomenon in which higher expectations lead to an increase in performance; a form of self-fulfilling prophecy.

Double-Masked Study

A type of clinical trial where neither the participants nor the experimenters know who is receiving a particular treatment, reducing bias.

Selection Bias

A distortion in the outcome of a study due to non-random selection of participants, leading to an unrepresentative sample.

Double-Masked

A study design in which neither the participants nor the researchers know which participants belong to the control group and which to the experimental group, to prevent bias.