Asked by Jaiye Otulana on Jun 05, 2024
Verified
Which statement is false?
A) Once a monopoly is set up,it is possible to dislodge it.
B) Some monopolists have control over an essential resource.
C) Several competing firms can provide cheaper service than a natural monopoly.
D) As a firm grows larger,at first it realizes economies of scale,but eventually diseconomies of scale set in.
Diseconomies Of Scale
An increase in average total cost as output rises.
Monopoly
A market structure characterized by a single seller who has exclusive control over a product or service, with no close substitutes.
Natural Monopoly
A market situation where the most cost-efficient production level is achieved by a single firm due to high fixed or start-up costs, making it impractical for new entrants.
- Recognize the dynamics of a monopoly, including how monopolies establish and maintain their market power.
Verified Answer
AR
Andrea RomeroJun 08, 2024
Final Answer :
C
Explanation :
Statement C is false because a natural monopoly occurs when a single firm can supply a good or service to an entire market at a lower cost than could two or more firms. This means that, contrary to the statement, several competing firms would not be able to provide cheaper service than a natural monopoly due to the efficiencies and cost savings that arise from economies of scale inherent in a natural monopoly.
Learning Objectives
- Recognize the dynamics of a monopoly, including how monopolies establish and maintain their market power.