If the government requires a natural monopoly to price at marginal cost:
a. monopoly firms will earn zero economic profits because the price of the good equals the cost of producing that good.
b. monopoly firms will operate at a loss because P < AC.
c. more firms will be able to enter the market.
d. producer surplus will increase because quantity supplied is greater.
b
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Macroeconomics is the study of individual economic markets
Indicate whether the statement is true or false
Which of the following is not a source of monopoly power?
A. Patents B. Rapid low cost technological change in the industry C. Exclusive control over inputs D. Economies of scale
Which of the following is not an example of a "lag" that diminishes the potential impact of fiscal policy?
A) the data lag B) the recessionary lag C) the legislative lag D) the transmission lag E) None of the above; all are examples of such lags.
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A. steadily increased. B. fell from 1945 until around 1970 and rose thereafter. C. steadily fell. D. fell from 1945 until around 1980 and rose thereafter.