Under a marginal cost pricing rule, a regulated natural monopoly
A) makes a positive economic profit and there is a deadweight loss.
B) makes zero economic profit and there is no deadweight loss.
C) incurs an economic loss and there is a deadweight loss.
D) incurs an economic loss and there is no deadweight loss.
D
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The fact that supermarkets, a land-intensive form of organization, have become the dominant form of grocery store in the United States suggests that:
A) there is little or no potential for input substitution in the grocery store business. B) transportation costs are insignificant in the grocery store business. C) land is a relatively inexpensive input in the grocery store business. D) labor is relatively inexpensive in the grocery store business.
An example of monopoly power in input markets is
A) major league baseball owners in the market for player services. B) the United Auto Workers union in the market for auto worker services. C) OPEC in the market for crude oil. D) all of the above
Which of the following describes a tying contract?
a. The seller of one product requires the buyer to purchase some other product(s). b. One firm buys the stock of a competing firm. c. The directors of one company serve on the board of directors of another company in the same industry. d. An agreement between a manufacturer and a retailer based on the condition that the retailer is not to carry any rival products of the manufacturer.
If there is a political business cycle and the Federal Reserve supports the incumbent, then we should expect that prior to elections the Fed would
a. raise interest rates to shift aggregate demand left. b. raise interest rates to shift aggregate demand right. c. reduce interest rates to shift aggregate demand left. d. reduce interest rates to shift aggregate demand right.