What potential problem is there with rate of return pricing?
What will be an ideal response?
The monopolist might exaggerate its costs and mislead the regulator. In this case, the regulator allows the firm to increase its price, so the monopolist has no incentive to operate efficiently and cost effectively.
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What happens to the price of the product and total revenue for a perfectly competitive firm if it doubles the amount of output it supplies in the market?
What will be an ideal response?
According to the Keynesian view, an increase in the money supply will cause interest rates to rise, causing levels of investment to fall
Indicate whether the statement is true or false
If a country’s GDP increases, but its debt decreases during that year, what will happen to the country’s debt to GDP ratio for the year in proportion to the magnitude of the changes?
a. Increase or decrease b. Decrease because its debt decreased c. Increase because GDP increased d. Decrease
A production function is a relationship between inputs and
a. quantity of output. b. revenue. c. costs. d. profit.