Generally Speaking, If a Firm Faces Decreasing Average Total Costs

question 208

Multiple Choice

Generally speaking, if a firm faces decreasing average total costs of production throughout its entire range of output, then

• A) more firms will enter the market.
• B) it will be unable to remain in business.
• C) the firm is a natural monopoly.
• D) the firm is able to earn only a normal profit.

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Definitions:

Import Quotas

A government-imposed limit on the quantity of a particular good that can be imported into a country during a specified period of time.

Protected Goods

Goods that are safeguarded from competition by trade barriers such as tariffs or quotas.

Import Quota

A government-imposed limit on the quantity or value of goods that can be imported into a country, used to protect domestic industries.

Suzuki Motorcycle

A brand of motorcycles manufactured by the Japanese company Suzuki, known for their reliability, performance, and innovation.