Refer to the above figure. If the government requires the natural monopolist to charge the efficient price, it will charge price
A. P2 and sell Q1 units.
B. P1 and sell Q4 units.
C. P3 and sell Q3 units.
D. P5 and sell Q1 units.
Answer: B
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The largest category of financial intermediary is the
A) commercial banks. B) savings-and-loans. C) insurance companies. D) mutual funds.
Which of the following statements is TRUE?
A) There is a direct relationship between investment and the interest rate. B) There is an inverse relationship between investment and the interest rate. C) There is no relationship between investment and the interest rate. D) Investment is always less than savings.
Davy's Doggie Daycare rents a warehouse and field for $2,000 a month to house its boarding pooches. Farmer Fred owns the property, he used to use it for farming and made $3,000 a month, but has since retired. What is the cost of the warehouse and field to Davy?
A. It is an implicit cost of $3,000. B. It is an explicit cost of $2,000. C. There is both an explicit and implicit cost totaling $5,000. D. It is an implicit cost of $0.
A firm in a perfectly competitive industry is producing 50 units, its profit-maximizing quantity. Industry price is $2, total fixed costs are $25, and total variable costs are $40. The firm's economic profit is
A) $15. B) $30. C) $35. D) $60