When Economies of Scale Exist So That One Firm Can

question 79

Multiple Choice

When economies of scale exist so that one firm can meet the entire market demand at a lower average total cost than two or more firms,

• A) a natural monopoly develops.
• B) the monopoly encounters competition.
• C) economic profit is reduced to zero.
• D) the monopoly converts all of the consumer surplus into economic profit.
• E) there is always the opportunity to price discriminate.

Understand the foundations and assertions of conflict theory in analyzing social change.

Identify the process and consequences of modernization in terms of social cohesion and differentiation.

Understand the significance of accurate demographic data and its impact on social policy and resources allocation.

Recognize the role of economic structures in driving social change and the development of societal organization.

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Definitions:

Compounded Annually

The method of calculating interest where the total interest is added to the principal once per year, resulting in interest earning interest annually.

Perpetuity

A type of annuity that pays a fixed sum of money to an individual indefinitely.

Compounded Quarterly

Compounded Quarterly is a method of calculating interest where the interest earned over a quarter is added to the principal, and the subsequent interest calculation will include the previously earned interest.

Deferral Period

A span of time during which payments, especially loan or insurance premiums, are postponed.