Compared to the profit-maximizing equilibrium of a natural monopoly, a price cap regulation ________ the firm's price and ________ the firm's output
A) raises; decreases
B) lowers; increases
C) raises; increases
D) lowers; decreases
B
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Incentives
A) are always used to encourage particular behaviors. B) are always used to discourage particular behaviors. C) can be used to either encourage or discourage particular behaviors. D) are never used to encourage or discourage particular behaviors.
The price elasticity of supply is equal to
A) the change in quantity supplied divided by the change in price. B) the percentage change in quantity supplied divided by the percentage change in price. C) the value of the slope of the supply curve. D) the percentage change in price divided by the percentage change in quantity supplied.
Internal economies of scale will ________ average cost when output is ________ by ________
A) reduce; increased; a firm B) increase; increased; a firm C) reduce; increased; the industry D) increase; increased; the industry E) reduce; reduce; the industry
First movers
A) are usually firms with large market share. B) are the first to bring out a new product. C) usually copy successful products. D) are mainly found in the computer industry. E) have memorable trade names.