A price ceiling imposed on a monopoly may:
A. drive the monopolist out of business.
B. lead to no shortage.
C. lead to a shortage.
D. All of the statements associated with this question are correct.
Answer: D
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Transactions costs are defined to be the:
A. costs a buyer or seller incurs to make a transaction take place. B. taxes they pay when purchasing a good or service. C. fees they are charged if they purchase a good or service on credit. D. costs a buyer faces if they re-sell a good or service.
Suppose the cost function is C(Q) = 50 + Q ? 10Q2 + 2Q3. At 3 units of output, the marginal cost curve is:
A. in the declining stage. B. at the maximum level. C. in the increasing stage. D. at the minimum level.
Science is justified through heuristic models.
Answer the following statement true (T) or false (F)
Regulation that is based on allowing prices to reflect only the actual operating cost of production is known as
A. cost-of-service regulation. B. rate-of-return regulation. C. average cost regulation. D. marginal cost regulation.