Marginal cost pricing regulations for a natural monopolist ensure that
a. b and e
b. price reflects the value society places on the last unit produced
c. output will continue to grow until the required subsidy is zero
d. fair pricing schemes are more profitable
e. subsidization will be necessary
A
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When a lack of information exists for parties to a deal:
A. it is always worth getting more information before making a decision. B. the cost of acquiring information sometimes is prohibitive and not worth it. C. an exchange will never happen. D. the exchange will always happen anyway, with little chance of maximizing surplus.
The problems of asymmetric information exchange arise ultimately because
a. one party to the exchange possesses different information than another b. one party has more information than another c. one party knows nothing d. one party cannot independently verify the information of another e. information is scarce
Suppose an oligopolistic firm assumes that its rivals will ignore a price increase but match a price cut. In this case, the firm perceives its demand curve to be:
A. kinked, being steeper above the going price than below. B. kinked, being steeper below the going price than above. C. linear, being more elastic at higher prices. D. linear, being less elastic at lower prices.
The term "fiduciary" comes from the Latin fiducia, which means
A. money. B. trust or confidence. C. gold. D. value.