The following table provides information about long-run average cost curve of a firm: Quantity LRAC 100 50 200 43 300 39 400 39 500 44 600 52 O a. This cost structure is an example of natural monopoly. O b. For the first 300 units of output, this firm has diseconomies of scale.

The following table provides information about long-run average cost curve of a firm: Quantity LRAC 100 50 200 43 300 39 400 39 500 44 600 52 O a. This cost structure is an example of natural monopoly. O b. For the first 300 units of output, this firm has diseconomies of scale.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 7P

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Question

The following table provides information about long-run average cost curve of a firm:
Quantity
LRAC
100
50
200
43
300
39
400
39
500
44
600
52
O a. This cost structure is an example of natural monopoly.
O b. For the first 300 units of output, this firm has diseconomies of scale.
O c. For output levels greater than 400, the firm has economies of scale.
O d. For output levels between 300 and 400, the firm has constant returns to scale.

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