Draw a diagram for a firm in an industry in which the fixed costs are high and the marginal cost is low and constant.
(A)Would you expect to find many firms in this industry? Explain.
(B)Show that a firm in this industry is not producing efficiently.
(C)In this example,should regulators require this type of firm to produce at the level at which price equals marginal cost? Why? What types of regulation would enable the firm to produce at a more efficient level of output and yet stay viable in the long run?

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The Answer of Draw a diagram for a firm in an industry in which the fixed costs are high and the marginal cost is low and constant.
(A)Would you expect to find many firms in this industry? Explain.
(B)Show that a firm in this industry is not producing efficiently.
(C)In this example,should regulators require this type of firm to produce at the level at which price equals marginal cost? Why? What types of regulation would enable the firm to produce at a more efficient level of output and yet stay viable in the long run?

Draw a Diagram for a Firm in an Industry in Which