Exhibit 9.1

-Refer to Exhibit 9.1,which shows the long-run average cost of a firm.The downward-sloping long-run average cost curve indicates a monopoly characterized by which type of barrier to entry?

Question

Exhibit 9.1
 
-Refer to Exhibit 9.1,which shows the long-run average cost of a firm.The downward-sloping long-run average cost curve indicates a monopoly characterized by which type of barrier to entry?

Quizplus · Accepted Answer

The downward-sloping long-run average cost curve indicates that the firm is experiencing economies of scale. This suggests that the firm has a natural monopoly due to its ability to achieve lower costs as it increases its scale of production, making it difficult for other firms to enter the market and compete efficiently.

Exhibit 9.1 -Refer to Exhibit 9.1,which Shows the Long-Run Average Cost of Long-Run