If a regulatory commission sets the regulated price equal to marginal cost for a natural monopoly,
a. losses will result
b. government subsidies will be unnecessary
c. the firm will earn economic profits
d. new firms will want to enter
e. resource use will not be optimal
A
Economics
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What will be an ideal response?
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a. the quantity theory of money. b. monetarism. c. Say’s Law. d. the Keynesian critique of classical economics.
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Internal markets cannot suffer market failure like an external market
Indicate whether the statement is true or false
Economics
Monopolies can misallocate resources by restricting output in an attempt to raise prices and profits
a. True b. False Indicate whether the statement is true or false
Economics