Natural monopolies result from the peculiar relationship between
a. government regulation and the ownership of scarce resources
b. threats to potential entrants and the price of the product
c. the size of market demand and the firm's cost structure
d. product differentiation and the ownership of patents
e. the firm's advertising campaigns and its labor policies
C
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Refer to the figure above. What is the equilibrium price and quantity of the good?
A) Equilibrium price = $40, equilibrium quantity = 20 units B) Equilibrium price = $60, equilibrium quantity = 10 units C) Equilibrium price = $60, equilibrium quantity = 20 units D) Equilibrium price = $80, equilibrium quantity = 30 units
Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies
What will be an ideal response?
Foreign exchange swaps involve:
A) selling one currency on the spot market and at the same time purchasing a forward B) trading goods rather than money to improve efficiency C) delaying payment of a spot contract until the currency is actually delivered D) none of the above
The economic decisions of central planners often are wrong because they have little understanding of
a. local economic conditions b. bureaucracies c. Karl Marx's theories d. democracy