When Economies of Scale Limit the Number of Firms in an Industry

question 183

Multiple Choice

When economies of scale limit the number of firms in an industry to 3,there is a

• A) natural monopoly.
• B) natural oligopoly.
• C) legal oligopoly.
• D) legal cartel.
• E) natural monopolistic competition.

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Definitions:

Unlimited Liability

A legal structure wherein the business owners are personally responsible for all the debts and liabilities of the business.

Voting Rights

The rights of shareholders to vote on company matters, typically exercised at annual meetings and proportional to the number of shares held.

Dividend Paid

The portion of earnings a company distributes to its shareholders, typically expressed as a dollar amount per share.

Outstanding Shares

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.