-Refer to the Above Diagrams

question 118

Multiple Choice

-Refer to the above diagrams.The solid lines are production possibilities curves;the dashed lines are trading possibilities curves.The data contained in the production possibilities curves are based on the assumption of:

• A) imperfect substitutability of resources as between beer and pizza production.
• B) constant costs.
• C) decreasing costs.
• D) increasing costs.

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Definitions:

Monopoly Power

The control held by a single entity over the entire market for a product or service, allowing it to significantly influence or set prices.

Lawsuits

Legal actions taken by one party against another for the redress of grievances in a court of law.

Wal-Mart

A multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.

Natural Monopoly

A market condition where due to high fixed costs or unique product, a single firm can supply a product or service to an entire market at a lower cost than two or more firms.