Select the Positive Statement That Completes the Following Sentence

question 19

Multiple Choice

Select the positive statement that completes the following sentence. 'If the competition is prohibited in the car manufacturing industry:

• A) cost per unit of output will rise.'
• B) cars will be priced low.'
• C) the rate of inflation should hold steady.'
• D) government should pay compensation to workers.'

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Definitions:

Economies of Scale

The financial benefits that companies gain as a result of their size, production volume, or operational scope, where the cost for each unit of production typically falls as the scale expands.

Third-Degree Price Discrimination

A pricing strategy where different prices are charged to different groups of consumers for the same product, based on elasticity of demand.

Monopoly Power

The ability of a single seller to set prices and control the market for a good or service without significant competition.

Peak-Load Pricing

Practice of charging higher prices during peak periods when capacity constraints cause marginal costs to be high.