A horizontal long run average cost curve over the relevant range of output is not a source of monopoly.

Here's why:

1. Economies of scale over the relevant range of output: This can lead to a monopoly because if one firm can produce at a lower cost due to economies of scale, it can undercut competitors and gain a monopoly.

2. Patents: These give a firm exclusive rights to produce a product for a certain period of time, preventing competition and creating a monopoly.

3. Government licenses or franchises: These can create a monopoly by giving one firm exclusive rights to operate in a certain area or market.

4. Network economies: These occur when the value of a product or service increases as more people use it. This can lead to a monopoly as one firm becomes the preferred choice of consumers.

5. A horizontal long run average cost curve over the relevant range of output: This does not create a monopoly. It suggests that all firms in the industry have the same costs and therefore, it is likely to be a perfectly competitive market. In a monopoly, the firm would have lower costs than potential competitors due to economies of scale or other factors.

Question

A horizontal long run average cost curve over the relevant range of output is not a source of monopoly.

Here's why:

1. Economies of scale over the relevant range of output: This can lead to a monopoly because if one firm can produce at a lower cost due to economies of scale, it can undercut competitors and gain a monopoly.

2. Patents: These give a firm exclusive rights to produce a product for a certain period of time, preventing competition and creating a monopoly.

3. Government licenses or franchises: These can create a monopoly by giving one firm exclusive rights to operate in a certain area or market.

4. Network economies: These occur when the value of a product or service increases as more people use it. This can lead to a monopoly as one firm becomes the preferred choice of consumers.

5. A horizontal long run average cost curve over the relevant range of output: This does not create a monopoly. It suggests that all firms in the industry have the same costs and therefore, it is likely to be a perfectly competitive market. In a monopoly, the firm would have lower costs than potential competitors due to economies of scale or other factors.

Knowee AI · Accepted Answer

A horizontal long run average cost curve over the relevant range of output is not a source of monopoly.

Here's why:

1. Economies of scale over the relevant range of output: This can lead to a monopoly because if one firm can produce at a lower cost due to economies of scale, it can undercut competitors and gain a monopoly.

2. Patents: These give a firm exclusive rights to produce a product for a certain period of time, preventing competition and creating a monopoly.

3. Government licenses or franchises: These can create a monopoly by giving one firm exclusive rights to operate in a certain area or market.

4. Network economies: These occur when the value of a product or service increases as more people use it. This can lead to a monopoly as one firm becomes the preferred choice of consumers.

5. A horizontal long run average cost curve over the relevant range of output: This does not create a monopoly. It suggests that all firms in the industry have the same costs and therefore, it is likely to be a perfectly competitive market. In a monopoly, the firm would have lower costs than potential competitors due to economies of scale or other factors.

Which of the following is not a source of monopoly?Group of answer choicesEconomies of scale over the relevant range of output.Patents.Government licences or franchises.Network economies.A horizontal long run average cost curve over the relevant range of output.

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