Multiple Choice QuestionMonopolists use economies of scale to block the entry of new firms into an industry by reducing Blank______ so that other firms cannot compete.Multiple choice question.marginal costspricesbarriers to entryaverage variable costs
Question
Multiple Choice QuestionMonopolists use economies of scale to block the entry of new firms into an industry by reducing Blank______ so that other firms cannot compete.Multiple choice question.marginal costspricesbarriers to entryaverage variable costs
Solution
The correct answer is "average variable costs". Monopolists use economies of scale to reduce average variable costs, making it difficult for new firms to compete. This is because economies of scale allow monopolists to produce goods or services more efficiently (i.e., at a lower cost) as they increase the scale of production. This lower cost of production can be used as a barrier to entry for new firms, as they may not be able to achieve the same low cost of production when starting out.
Similar Questions
Multiple Choice QuestionMonopolists use economies of scale to block the entry of new firms into an industry by Blank______.Multiple choice question.raising prices because a monopolist's cost per unit is very highproducing a surplus of goods and flooding the marketdeveloping innovative technologies that make it difficult for another firm to competelowering prices so that another firm cannot compete
Multiple Choice QuestionEntry of new firms into monopolistically competitive industries is relatively easy because Blank______.Multiple choice question.existing firms experience economies of scaleadvertising is not requiredcapital requirements are lowcompetitors are large firmsproduct development is unnecessary
Multiple Choice QuestionMonopolistically competitive firms do not achieve allocative efficiency because the Blank______.Multiple choice question.output produced is less than optimal and consumers pay a lower than competitive price, causing inefficient use of resources for societyprice for a monopolistically competitive firm is lower than the average costoutput produced is more than optimal and consumers pay a lower than competitive price, causing inefficient use of resources for societyprice for a monopolistically competitive firm exceeds the marginal cost
Multiple Choice QuestionWhat term is used to describe declining average total costs with added firm size?Multiple choice question.Economies of scaleBarriers to entryPure monopolyDiseconomies of scale
Multiple Choice QuestionMonopolistically competitive firms are not productively efficient because output is less than society's optimal level because a producer's Blank______.Multiple choice question.average variable cost per unit is not at its optimal possible costaverage fixed cost per unit is not at its lowest possible costmarginal revenue per unit is not at its optimal possible priceaverage total cost per unit is not at its lowest possible cost
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.