Question
Briefly explain what is wrong with the following statements? A. Economies of scale lead to a downward sloping marginal cost curve. B. It is easy
Briefly explain what is wrong with the following statements?
A. Economies of scale lead to a downward sloping marginal cost curve.
B. It is easy to get rid of monopolies; all it takes is that the government uses its legal power to remove artificial barriers to entry and break up large conglomerates into smaller entities.
C. Monopolistic competition is efficient because, unlike monopolies, firms in monopolistic competition cannot earn supernormal profit in the long run.
D. It makes perfect sense for all oligopolists in an industry to agree to form a cartel because in that case they can behave like a monopolist.
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