Under a price cap regulation, the regulated industry has an incentive to
A) operate efficiently and not inflate its costs.
B) inflate costs.
C) decrease its output.
D) None of the above answers is correct.
A
You might also like to view...
The most vocal political pressure for tariffs is generally made by
A) consumers lobbying for export tariffs. B) consumers lobbying for import tariffs. C) consumers lobbying for lower import tariffs. D) producers lobbying for export tariffs. E) producers lobbying for import tariffs.
If Angelo's Pizza Restaurant has a constant marginal cost of $50 for each additional table in the restaurant and a constant marginal cost of $12 for operating each additional table, what is Angelo's long-run marginal cost per table?
A) $38 B) $62 C) $12 D) $50
If Sam Jackson voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Mr. Jackson is considered:
a. frictionally unemployed. b. cyclically unemployed. c. seasonally unemployed. d. structurally unemployed. e. unwise to quit his job without already having another one.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.