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//www.referenceforbusiness.com/encyclopedia/Eco-Ent/Economies-of-Scale.html Choose two of the following topics to discuss within the discussion...

This question was answered on Jan 24, 2013. View the Answer
http://www.referenceforbusiness.com/encyclopedia/Eco-Ent/Economies-of-Scale.html

Choose two of the following topics to discuss within the discussion thread:

1. Discuss how average cost relates to the concept of 'economies of scale.'

2. Discuss why the average cost curve is U-shaped in the long-run and reference the Better Steel Corporation as an example.

3. If for a particular firm, the average cost of producing the product reaches a minimum at such an output level that it is large enough to satisfy the product demand of the entire market and this firm is experiencing economies of scale, what does it have an obvious incentive to do and why?

4. If there are several such firms in the market, is economic warfare likely to result and why?

5. What is the most likely outcome of such economic rivalry?

6. Such cases where economies of scale lead to a monopolistic market structure are considered examples of "natural monopolies." How is such a monopoly considered 'defensible?'

7. Discuss reasons the public might have for insisting that the government regulate natural monopolies.

8. The electric power industry is held up in the article as an example of a natural monopoly. Brainstorm other examples that can be readily identified in the present market economy.

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Please find the solution attached. I have... View the full answer

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http://www.referenceforbusiness.com/encyclopedia/Eco-Ent/Economies-of-Scale.html
Choose two of the following topics to discuss within the discussion thread:
1. Discuss how average cost relates to...

This question was asked on Jan 23, 2013 and answered on Jan 24, 2013.

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