demand. For example, at the point where the demand curve and the average cost curve meet, there are

economies of scale.

8. Improvements in technology that allowed phone calls to be made via microwave transmission,

communications satellites, and other wireless technologies.

9. More consumer choice. Cheaper phone calls, especially long distance. Better-quality phone service in

many cases. Cheaper, faster, and better-quality data transmission. Spin-off technologies like free Internet-

based calling and video calling.

10. More choice can sometimes make for difficult decisions—not knowing if you got the best plan for your

situation, for example. Some phone service providers are less reliable than AT&T used to be.
552

Chapter 12

1. a. positive externality

b. negative externality

c. positive externality

d. negative externality

e. negative externality

2. a. supply shifts left

b. supply shifts left

c. supply stays the same

d. supply shifts left

3. a. price will rise
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