Asked by Kayla Taylor on Apr 27, 2024
Verified
Large minimum efficient scale of plant combined with limited market demand may lead to:
A) natural monopoly.
B) patent monopoly.
C) government franchise monopoly.
D) shared monopoly.
Minimum Efficient Scale
The smallest amount of production a company can achieve while still taking full advantage of economies of scale regarding cost per unit.
Natural Monopoly
A type of monopoly that exists due to the high fixed or start-up costs of operating a business in a specific industry, making it inefficient for new firms to enter.
Limited Market
A market with restrictions on the scope of products or services that can be sold or on who can participate as buyers or sellers.
- Examine the influence of economies of scale and possession of crucial resources on the configuration of the market.
- Comprehend the idea of natural monopoly and the reasons behind its occurrence.
Verified Answer
Learning Objectives
- Examine the influence of economies of scale and possession of crucial resources on the configuration of the market.
- Comprehend the idea of natural monopoly and the reasons behind its occurrence.
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