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?