A natural monopolist that is price-regulated at the marginal cost output level will:
a. be producing at the same output and price that an unregulated natural monopolist would choose.
b. produce the optimal level of output and earn an economic profit greater than zero.
c. produce the optimal level of output and earn a normal profit.
d. eventually incur losses if MC is less than ATC.
d. eventually incur losses if MC is less than ATC.
You might also like to view...
When technology increases the supply of a good and lower prices increase the quantity demanded,
A) the economy is reallocating resources to achieve an efficient allocation. B) consumer surplus falls. C) the invisible hand is unnecessary. D) the marginal benefit of the good increases with the quantity produced. E) the economy is no longer efficient because the quantity changes.
With a change in the money supply, a vertical LM curve shifts a horizontal distance equal to
A) that change. B) that change times velocity. C) that change divided by velocity. D) that change times the simple Keynesian multiplier.
A congressman states, "If a government attempts to increase employment through increased government spending, all we will end up with is a higher price level." This congressman assumes that the
A) aggregate demand curve is a horizontal line. B) aggregate demand curve is a vertical line. C) aggregate supply curve is a horizontal line. D) aggregate supply curve is a vertical line.
Contrary to the product market, in the currency market demand is positively sloped reflecting the greater speculative yield potential from high priced currencies
Indicate whether the statement is true or false