Suppose the technology of an industry is such that the typical firm's minimum efficient scale is 18 units per day at an average long- run cost of $1600 per unit. If the total quantity demanded at a price of $1750 per unit is 16 units per month, the likely result would be

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Since the minimum efficient scale for the industry is 18 units per day, it is likely that only one firm can produce at this scale and achieve the minimum average cost. This suggests a natural monopoly where a single firm meets the entire demand for the product at a price of $1750 per unit.

Suppose the Technology of an Industry Is Such That the Typical