In the late twentieth century, some regulators began using _______________, which required public utilities to charge a fixed price that would decline slightly over time.
a. cost-plus regulation
b. natural monopolies
c. price cap regulation
d. price deregulation
c. price cap regulation
In the 1980s and 1990s, some regulators of public utilities began to use price cap regulation, where the regulator sets a price that the firm can charge over the next few years. A common pattern was to require a price that declined slightly over time. If the firm can find ways of reducing its costs more quickly than the price caps, it can make a high level of profits. However, if the firm cannot keep up with the price caps or suffers bad luck in the market, it may suffer losses.
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If higher inflation is expected in the future, then the
A) SAS curve shifts rightward. B) AD curve shifts rightward. C) LAS curve shifts rightward. D) None of the above answers is correct.
The present value of a future sum of money is the amount that, if invested today, will grow
A) as large as that future sum, given the interest rate. B) at a constant rate forever. C) as large as that future sum, less taxes payable. D) as large as that future sum, if the interest rate is zero.
From the 1930s until today, unions have experienced particularly fast growth in the United States.
Answer the following statement true (T) or false (F)
Suppose an industry has total sales of $25 million per year. The two largest firms have sales of $6 million each, the third largest firm has sales of $2 million, and the fourth largest firm has sales of $1 million. The four-firm concentration ratio for this industry is
A. 60 percent. B. 36 percent. C. 25 percent. D. 50 percent.