1. Assuming a constant marginal cost, a lower price elasticity of demand would c

Question

1. Assuming a constant marginal cost, a lower price elasticity of demand would call for a relatively lower mark-up ration.

True

False

2. Mark-up pricing might be more suitable for monopolies

True

False

3. Relatively high transportation costs make it easier for a firm to achieve a natural –monopoly status.

True

False

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

False

5. The higher the fixed cost the lower the break-even output quantity.

True

False

Explanation / Answer

1. False

2. True

3. False

4. True

5. False

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