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29 Sep 2019
Suppose a single firm in a market has a cost function
C(q) =24+4q+q2.
(a) Does the cost function exhibit economies of scale for all levels of output? If not, does it
exhibit economies of scale for some levels of output? Explain.
(b) Suppose the demand for the product is
q(p) =240/2p. Is this market a natural monopoly?
Why or why not?
(c) Suppose the demand for the product is q(p) =12/2p. Is this market a natural monopoly?
Why or why not?
Suppose a single firm in a market has a cost function
C(q) =24+4q+q2.
(a) Does the cost function exhibit economies of scale for all levels of output? If not, does it
exhibit economies of scale for some levels of output? Explain.
(b) Suppose the demand for the product is
q(p) =240/2p. Is this market a natural monopoly?
Why or why not?
(c) Suppose the demand for the product is q(p) =12/2p. Is this market a natural monopoly?
Why or why not?
Chika IlonahLv10
29 Sep 2019