Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
bartleby

Concept explainers

Question
Book Icon
Chapter 14, Problem 1CQQ
To determine

The cause of the natural Monopoly.

Expert Solution & Answer
Check Mark

Answer to Problem 1CQQ

Option ‘d’ is correct.

Explanation of Solution

Option (d):

Natural monopoly exists due to higher cost of production, and an increase in the output will decrease the average total cost. Thus, option ‘d’ is correct.

Option (a):

Under Natural monopoly, firms can control either the price or quantity to increase the sales. If firms increase the price, then there will be a fall in the output leading to a decrease in the marginal revenue. Thus, option ‘a’ is incorrect.

Option (b):

When the large firms maximize its output by increasing their quantity output, then the marginal cost decreases due to the benefits of economies of scale under monopoly. Thus, option ‘b’ is incorrect.

Option (c):

Under Natural monopoly, firms can control either the price or quantity which allows the firm to increase the average revenue by increasing the price. Thus, option ‘c’ is incorrect.

Economics Concept Introduction

Concept introduction:

Monopoly: Monopoly is a market situation where a single firm exists with a large number of buyers without any available substitute.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
You are a tax advisor consulted by a prospective client, Ms. Fatima Perez. Ms. Perez is a self- described digital nomad who engages in the following global activities: • Investing in international equities and crypto assets • Providing consulting services in artificial intelligence and related technology sectors Although she is currently a fiscal resident of Madrid, Spain, her professional and investment activities span across multiple countries. She is now considering relocating her fiscal residence to Cancun, Mexico, where she intends to continue operating her consulting and investment business. Given Mexico's geographical and economic proximity to the United States, Ms. Perez is exploring the possibility of expanding her client base and investment portfolio into the U.S. market. To facilitate this, she is considering forming a U.S.-based Limited Liability Company (LLC). With this context in mind, please address the following questions: 1. What is a Limited Liability Company (LLC),…
« ess Tips ess Tips OUT A-CHC me score Econ Home https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentId=6098932483871761 CENGAGE MINDTAP Chapter 15 Homework 7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 100 90 ㅁ ATC MC AVC 20 25 30 35 QUANTITY (Thousands of pounds) 45 The following graph plots the market demand curve for ruthenium. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 tirms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to piot the short-nun industry supply…
1. Explain with your own words the definition of Gross Domestic Product.   2. How does the growth rate of real GDP contribute to an improved standard of living?   3. Use the following data to answer the question. The table lists some macroeconomic data for the United States in 2008.   Item Billions of dollars   Wages paid to labor 8,000 Consumption expenditure 10,000 Net operating surplus 3,200 Investment 2,000 Government expenditure 2,800 Net exports –700 Depreciation 1,800   3a) Calculate U.S. GDP in 2008.   4. What is the key idea of classical growth theory.   5. Describe the 3 main theories of economic growth.   6. Explain the policies for achieving faster growth.   7. China's trend growth rate of real GDP per person was 2.2 percent a year before 1980 and 8.7 percent a year after 1980. In the year to August 2009, China's output increased by 11.3 percent. (Source : World Economic Otulook and FT.com, septembre 14,2009). Answer the following questions according to this information:…
Knowledge Booster
Background pattern image
Economics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Economics:
Economics
ISBN:9781285859460
Author:BOYES, William
Publisher:Cengage Learning
Text book image
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Text book image
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning