A natural monopoly has a declining _______ over a large range of output?

Related Mcqs:

1. The problem posed by a natural monopoly is that it faces a _____ This means that _______?

   A. increasing average cost curve, marginal cost lies above average cost
   B. increasing average cost curve, marginal cost lies below average cost
   C. decreasing average cost curve marginal cost lies above average cost
   D. decreasing average cost curve, marginal cost lies below average cost

2. Declining costs per unit of output results from international trade especially if ?

   A. International trade affords producers monopoly power
   B. National governments levy imports tariffs and quotas
   C. Producing goods entails increasing costs
   D. Economies of scale exist for producers

3. Which of the following is necessary for a natural monopoly ?

   A. economies of scale
   B. a high proportion of the total cost in the cost of capital goods
   C. the market is very small
   D. all of the above

4. Using government regulations to force a natural monopoly to charge a price equal to his marginal cost will ?

   A. Cause the monopolist to exit the market
   B. improve efficieny
   C. raise the price of good
   D. attract additional firms to enter the market

5. If regulators break up a natural monopoly into many smaller firms, the cost of production ?

   A. will rise
   B. will fall
   C. will remain the same
   D. could either rise or fall depending on the elasticity of the monopolist’s supply curve

6. A good produced by a natural monopoly is ?

   A. rival but not excludable
   B. neither rival nor excludable
   C. not rival but excludable
   D. both rival and excludable

7. Comparing a monopoly and competitive firm, the monopolist will ?

   A. produce less at a lower price
   B. produce more at a lower price
   C. produce less at a higher price
   D. produce less at a lower price

8. A monopoly may be self-perpetuating because profits may be used for ?

   A. research
   B. cost-saving
   C. technical advance
   D. all of the above

9. The social costs of monopoly power arises because ?

   A. marginal cost is set equal to marginal revenue
   B. price is less than marginal cost
   C. marginal consumer benefit is less than marginal revenue
   D. there is too little output at too high a cost

10. The natural rate of output is the amount of real GDP produced ?

    A. When the economy is at the natural rate of unemployment
    B. When the economy is at the natural rate of investment
    C. When the economy is at the natural rate of aggregate demand
    D. When there is no no unemployment