When Production Is Characterized by Persistently Declining Long-Run Average Costs

question 40

Multiple Choice

When production is characterized by persistently declining long-run average costs as output increases

• A) the costs of production are greater when competition exists than when a single firm produces a good.
• B) it is impossible for two firms to compete in the market.
• C) the costs are lower if a single firm exists, and even if the firm is unregulated, price will still be lower with a single firm.
• D) there is no need for the government to limit competition by licensing requirements.