Micromania's City Council has been discussing policy options regarding the local taxi company. Citizens have complained that it is a natural monopoly and that its fees are inappropriate. Which of the following would allow the company to stay in business while guaranteeing a "reasonable" taxi price for citizens?
a. average cost pricing
b. marginal cost pricing
c. laissez-faire pricing
d. countervailing pricing
e. contestable pricing
A
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The figure above shows that the unregulated market equilibrium occurs at a tuition of ________ a year and ________ million students
A) $15,000; 7.5 B) $25,000; 15 C) $15,000; 15 D) $25,000; 7.5 E) $38,000; 7.5
A $0.2 trillion increase in government purchases increases the quantity demanded by $1.0 trillion, price level remaining constant. This additional spending reflects the _____ effect
a. recessionary b. expansionary c. simple spending multiplier d. income e. substitution
Which of the following is a characteristic of a natural monopoly?
a. Fixed costs are typically a small portion of total costs. b. Average total cost declines over large regions of output. c. The product sold is a natural resource such as diamonds or water. d. All of the above are correct.
In the long run, 
A. the total revenue curve will change its slope. B. the firm will operate at point C. C. the firm will operate at point B. D. the firm will operate at point D.