If the local cable TV company is a natural monopoly and required by regulators to set its price equal to marginal cost, there is a deadweight loss in the market and the firm might need a government subsidy to survive
Indicate whether the statement is true or false
FALSE
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Marginal social cost is equal to
A) the amount people who buy a product pay for another unit. B) whatever producers have to pay to produce output. C) the sum of marginal private cost and the marginal external cost. D) the average of marginal private cost and the marginal external cost. E) None of the above answers is correct.
Suppose that you own a monopolistically competitive firm. Using the three-step method, calculate whether your company is making economic profits, economic losses, or zero profits. Use hypothetical numbers for your calculations. Do not use examples or numbers from the text.
What will be an ideal response?
Joan can make and bottle 8 smoothies an hour. If she works with a friend, they can make and bottle 18 smoothies an hour. What is the marginal product of labor?
(A) 26 (B) 9 (C) 2 (D) 10
The GDP deflator is a measure of the
A) total production of the economy adjusted for inflation. B) total production of the economy unadjusted for inflation. C) average level of prices of final goods and services in the economy. D) average level of prices of intermediate goods and services in the economy.