What is a public franchise? Are all public franchises natural monopolies?
What will be an ideal response?
A public franchise is a firm which the government designates as the only legal provider of a good or service. It is doubtful that most public franchises are natural monopolies. If they were, they wouldn't need the government to restrict their competitors.
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Both optimization in levels and optimization in differences:
A) consider only the benefits from different alternatives. B) consider only the costs incurred in different alternatives. C) provide identical answers when comparing two alternatives. D) require the calculation of change in net benefits of switching from one alternative to another.
Refer to Figure 13-4. Should the firm represented in the diagram continue to stay in business despite its losses?
A) No, it is not able to cover its fixed cost. B) Yes, it should increase its revenue by raising its price. C) Yes, its total revenue covers its variable cost. D) No, it should shut down.
Which of these tools in an example of monetary policy?
a. reducing income taxes b. changing reserve requirements c. increase government spending d. borrowing money through deficit spending
Refer to the information. The multiplier in this economy is:
A. 4.
B. 5.
C. 2.5.
D. 3.5.