Limit pricing is also referred to as
A) competitive pricing
B) fair pricing
C) predatory pricing
D) all of these choices.
C
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How should a natural monopoly be regulated under the social interest theory of regulation?
A) by setting price equal to the average cost of production B) by allowing a price that maximizes the profit of the natural monopoly C) by using a marginal cost pricing rule D) by subsidizing other producers to compete with the monopoly E) by using rate of return regulation
The above figure shows the market for rice in Japan. S2 represents the domestic supply curve, and S1 represents the world supply curve. Suppose a free market exists. The smallest tariff necessary to completely eliminate imported rice is
A) $1 per unit. B) $2 per unit. C) $3 per unit. D) $4 per unit.
Assume a firm has the following cost and revenue characteristics at its current level of output: price=$10.00 . average variable cost=$8.00 and average fixed cost =$4.00 . This firm is
a. incurring a loss of $2.00 per unit and should shut down. b. realizing only a normal profit. c. realizing an economic profit of $2.00 per unit. d. incurring a loss per unit of $2.00 . but should continue to operate in the short run.
The situation where a single firm can supply the product to an entire market at a lower unit cost than if the market were split among a number of competing firms, is called a:
A. Dominant firm oligopoly B. Structured market C. Natural monopoly D. Trust