Graph 15-1
-Refer to Graph 15-1.The shape of the average-total-cost curve in the figure suggests an opportunity for a profit-maximising monopolist to exploit:
A)price discrimination
B)average cost pricing
C)economies of scale
D)diminishing marginal product

Question

Graph 15-1 
-Refer to Graph 15-1.The shape of the average-total-cost curve in the figure suggests an opportunity for a profit-maximising monopolist to exploit:
A)price discrimination 
B)average cost pricing 
C)economies of scale 
D)diminishing marginal product

Quizplus · Accepted Answer

The downward slope of the average-total-cost curve indicates economies of scale, which means that as the firm produces more output, the average cost of producing each unit decreases. This presents an opportunity for a monopolist to lower its average total cost and increase its profits.

Graph 15-1 -Refer to Graph 15-1.The Shape of the Average-Total-Cost Curve in Average-Total-Cost