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Wuthering Flights is an airline that sells seats for domestic air travel in the nation of Hamsterville. This firm experiences decreasing the average cost for
Wuthering Flights is an airline that sells seats for domestic air travel in the nation of Hamsterville. This firm experiences decreasing the average cost for the entire range of its demand curve due to very high start-up costs associated with running an airline. Which of the following must be true based on this information? Choose 1 answer: Choose 1 answer: (Choice A) It can produce and supply flights at a lower cost per unit than if there were many smaller firms. A It can produce and supply flights at a lower cost per unit than if there were many smaller firms. (Choice B) There is no deadweight loss. B There is no deadweight loss. (Choice C) It produces a quantity that is both productively efficient and allocatively efficient. C It produces a quantity that is both productively efficient and allocatively efficient. (Choice D) It is possible to eliminate deadweight loss by taxing this firm. D It is possible to eliminate deadweight loss by taxing this firm. (Choice E) It is productively efficient for the government to break up this monopoly. E It is productively efficient for the government to break up this monopoly
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