The Efficient Scale of One Firm Is 20 Units and the Average

question 52

Multiple Choice

The efficient scale of one firm is 20 units and the average total cost at the efficient scale is $30.The quantity demanded in the market as a whole at $30 is 40 units.This market is

• A) a natural duopoly.
• B) a legal duopoly.
• C) a natural monopoly.
• D) a legal monopoly.
• E) monopolistically competitive.

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Definitions:

Debt Costs

The total expenses associated with borrowing money, including interest payments and fees.

Financial Risk

The possibility of losing money on an investment or business venture, including the risk of not receiving anticipated returns.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to be reinvested in its core business or to pay debt.

Source of Capital

Various origins from which businesses or individuals can obtain funds, including equity, debt, and internal generation.