Governments regulate natural monopoly by capping the price at _____
A. marginal revenue and allowing the monopoly to maximize profit
B. marginal cost so that the monopoly is efficient and makes zero eco-nomic profit
C. average total cost, which allows the monopoly to be inefficient but make zero economic profit
D. the buyers' willingness to pay, which makes the monopoly operate efficiently
C Figure 12.12 illustrates the effects of using an average cost pricing rule to regulate the natural monopoly.
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Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular telephone are
A) 50,000 and $100. B) 80,000 and $80. C) 60,000 and $50. D) 100,000 and $20. E) 40,000 and $20.
Classical economists reject the idea that
a. more than one motive is involved in the demand for money b. a change in the money supply cannot affect real GDP c. the transactions demand for money cannot influence the velocity of money d. the velocity of money is variable e. the economy always operates at full employment
According to conservatives the Bureau of Labor Statistics
A. overstates the number of unemployed and overstates the unemployment rate. B. overstates the number of unemployed and understates the unemployment rate. C. understates the number of unemployed and understates the unemployment rate. D. understates the number of unemployed and overstates the unemployment rate.
Suppose there are four firms in an industry. The market shares of the four firms are 5 percent, 20 percent, 35 percent, and 40 percent. The Herfindahl-Hirschman index for that industry is
A) 6,650. B) 3,250. C) 1,250. D) 100.