To avoid driving a natural monopolist into bankruptcy, regulatory commissions:
a. allow the monopolist to enjoy an economic profit.
b. do not allow the monopolist to make an accounting profit.
c. subsidize the monopolist to help it break even.
d. allow the monopolist to earn a fair rate of return.
e. allow the monopolist to temporarily shut down.
d
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Which of the following will NOT affect the position of the market supply curve for a good?
A) The government grants a subsidy to the producers for each unit of a good that they produce. B) The price of the good increases. C) The number of sellers in the market increases. D) There is an increase in the prices of the inputs used in production.
ARCH and GARCH models are estimated using the
A) OLS estimation method. B) the method of maximum likelihood. C) DOLS estimation method. D) VAR specification.
Which of the following is true?
A. Monopolists never lose money in the short-run or long-run. B. Monopolies can only be overcome by government action. C. Having a recognizable brand name is a barrier to entry that can preserve monopoly power. D. Patents are granted to investors who have control over an essential resource.
"To be useful, a model must be completely realistic." Evaluate
What will be an ideal response?