Based on the graph showing marginal cost pricing versus average cost pricing, if the government makes the natural monopolist use marginal cost pricing, the monopoly will ______ money because PMC is ______ than ATC.
a. make; less
b. make; more
c. lose; more
d. lose; less
d. lose; less
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Mortgage loans made to borrowers with a more limited ability to repay are known as
a. subprime mortgages. b. credit default swaps. c. leveraged securities. d. mortgage backed securities.
The CORRECT ranking of the four basic market structures from low (Herfindahl-Hirschaman Index) HHI to high HHI is
A) perfect competition, oligopoly, monopolistic competition, monopoly. B) monopoly, oligopoly, monopolistic competition, perfect competition. C) perfect competition, monopolistic competition, oligopoly, monopoly. D) monopoly, monopolistic competition, oligopoly, perfect competition.
When a positive externality exists, the market is said to fail because it overproduces the good associated with the positive externality.
Answer the following statement true (T) or false (F)
Modern work in economic history by people like Robert Fogel (1964) and Albert Fishlow (1965) shows
(a) that railroads were the indispensable key to rapid economic growth in the 19th century. (b) that the levels of Gross National Product (GNP) reached in 1890 would have been reached in 1880 had it not been for reckless railroad speculation. (c) that less than 5% of the country's late 19th-century economic growth was attributable to railroads. (d) none of the above.