A monopoly has a

Accounting Dec 08, 2020

A monopoly has

a. constant average costs cost over the relevant range of output.

b. economies of scale over the relevant range of output.

c. constant returns to scale over the relevant range of output.

d. diseconomies of scale over the relevant range of output.

Expert Solution

b. economies of scale over the relevant range of output .

Economies of a scale state a situational phenomenon when the firm observes reduction in the average cost of producing output. Therefore, a monopoly firm attains surplus profit due to this reason.

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