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If there are significant economies of scale in an industry, then

A) a firm that is large may be able to produce at a lower unit cost than can a small firm.
B) a firm that is large will have to charge a higher price than will a small firm.
C) entry into that industry will be easy.
D) firms must differentiate their products to earn economic profits.

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Joshua Stredder
Joshua StredderLv10
5 Apr 2021

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Related questions

1) A natural monopoly exists when:

a. A few firms collude to make one large firm

b. Firms enter the industry as a result of profit incentives

c. Economies of scale provide large cost advantages to having one firm produce the industry's output

d. Firms naturally maximize regardless of market structure

 

2) A(n) ____ is a single firm with ___, whereas a(n) ___ implies an industry with ____ firm(s) and ____ .

a. Monopoly; barriers to entry; oligopoly; few; no barriers to entry

b. Oligopoly; no barriers to entry; monopoly; many; easy entry and exit

c. Monopoly; barriers to entry; monopolistic competition; many; easy entry and exit

d. Monopolistic competitor; barriers to entry; monopoly; one; barriers to entry

 

3) In monopolistic competition:

a. Each firm produces a product identical to that of every other firm in the industry

b. Firms are aware of their strategic interdependence

c. Firms earn large economic profits in the long run

d. Firms earn zero economic profits in the long run

 

4) A monopolistically competitive industry, such as corn snack chips, and a perfectly competitive industry, like wheat farming, are alike in that:

a. There are many firms in each industry

b. Firms in both types of industries produce similar but not identical products

c. Barriers to entry in both industries are large

d. Firms in both types of industries produce identical products

11)

A constant-cost, perfectly competitive industry experiences a permanent increase in demand. In adjusting to this change, what will happen to the price of the product?

 

It will increase in the short-run and then decrease in the long-run, but end up above its original level in the long-run.
 

It will increase in the short-run and then increase further in the long-run.
 

It will increase in the short-run and then decrease back to its original level in the long-run.
 

It will increase in the short-run and then decrease below its original level in the long-run.
 

It will decrease in the short-run but return to its original level in the long-run.

12)

Assume that a perfectly competitive firm owns or rents a higher-quality resource that results in lower average total costs and higher economic profits in the short run. What will happen in the long-run?

 

The price of the higher-quality resource will be bid upward resulting in economic rents and equalizing costs across firms.
 

New firms will enter and compete with any excess profits away.
 

None of the other answers is correct.
 

The government will tax away any excess profits.
 

The firm with the higher-quality resource will earn positive economic profits in the long run.

13)

Which of the following are characteristics of long-run equilibrium?

 

No firm has an incentive to change its level of output.
 

No firm has an incentive to change its plant size.
 

Economic profit is zero
 

All of the above
 

None of the above

14)

Which of the following statements is consistent with the textbook’s analysis of perfect competition?

 

Although individual perfectly competitive firms won’t pay to advertise, the industry as a whole may well advertise.
 

Higher costs for one firm in the industry will result in that firm charging a higher price than the other firms in the industry.
 

If all the firms in an industry charge an identical price for their products, this is clear evidence of collusive behavior.
 

All of the above
 

None of the above

15)

The assumptions that define the market structure known as monopoly include which of the following?

 

High barriers to entry.
 

There is one seller.
 

There are no close substitutes available.
 

All of the above
 

None of the above

32) Marginal revenue is less than price for a single-price monopolist because the A) firm's output decisions do not affect the selling price. B) firm must lower its price for all units if it wants to sell more of the product. C) monopolist charges a price higher than the unit production cost. D) monopolist must worry about how its price setting will lead to entry by other firms. E) monopolist has achieved economies of scale.

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