Answer either True or False for the following 5 questions and Explain your reasoning of why you feel the question is True or False.
1. Relatively high transportation costs make it easier for a firm to achieve a natural –monopoly status.
True or False
Explain?
2. Mark-up pricing might be more suitable for monopolies
True or False
Explain?
3. The higher the fixed cost the lower the break-even output quantity.
True or False
Explain?
4. When there are significant economies of scale, it might be more efficient to have a larger firm operating under its full capacity than having multiple firms, each operating at its peak efficiency.
True or False
Explain?
5. Assuming a constant marginal cost, a lower price elasticity of demand would call for a relatively lower mark-up ration.
True or False
Explain?