When significant economies of scale are present in the production process, an industry will tend naturally toward monopoly because
A) one firm will be able to produce the entire market output at a lower cost than several smaller firms.
B) marginal revenue will be less than market price, giving firms the incentive to equate marginal cost with price instead of equating marginal cost and marginal revenue.
C) economies of scale can only be present when firms produce identical products and there is no reason to have more than one firm producing the same exact product.
D) consumers will be unwilling to compare the prices charged by several different firms.
Correct Answer:
Verified
Q198: The figure below illustrates the cost and
Q199: Figure 11-16 Q200: Figure 11-20 Q201: Which of the following firms best fits Q202: How will the price and output of Q204: To maximize profit, the monopolist, whose cost Q205: A market situation in which only a Q206: Which of the following statements accurately describes Q207: To maximize profits, the monopolist shown in Q208: Which of the following statements accurately describes![]()
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