Suppose that you build a new jumbo jet that can carry five times more passengers than any other competitor.You have high fixed costs due to the quantity of capital used to build the jets.There's decreasing average cost for all levels of demand.In this case, your monopoly would result from which of the following?
A)sunk costs
B)location
C)economies of scale
D)government restrictions

Question

Quizplus · Accepted Answer

The monopoly in this case results from economies of scale, as the high fixed costs required to build the jumbo jet allow for decreasing average costs at all levels of demand. This creates a barrier to entry for potential competitors, as they would need to invest a significant amount of capital upfront to reach a similar scale and compete with the new jumbo jet. Sunk costs, location, and government restrictions are not relevant factors in this scenario.

Suppose That You Build a New Jumbo Jet That Can