hw2 - S teven Kordvani Business Economics (BUS 247) HW #...

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Steven Kordvani Business Economics (BUS 247) HW # 2-Fall 2008 Prof. Bradbury 1. The behavior of average cost which we associate with natural monopoly is falling cost 2. It makes more sense for one firm to satisfy all market demand rather than many firms to do so in the case that average costs are falling as outputs expand because of two reasons; one being that the less resources the more products there are, and two being that the higher the fixed cost is the lower the average cost is. 3. It makes sense for society to regulate a certain firm who may gain dominance in a scenario which has average costs falling and the forces of competition leading to this dominating firm because if one firm owned by one person is dominant in the market place and they are owned by one owner and the government doesn’t regulate they will have all the power and can do whatever they want therefore it does make sense for society to regulate the firm rather than let it behave as a sole seller in the market. 4.
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This note was uploaded on 02/15/2011 for the course ECON 247 taught by Professor Bradberry during the Fall '10 term at CUNY Queens.

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hw2 - S teven Kordvani Business Economics (BUS 247) HW #...

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