Price regulation of a natural monopoly may require subsidies.
Answer the following statement true (T) or false (F)
True
If naturally monopolistic firms are required to charge P = MC (price efficiency), economic profits will be negative because MC is below ATC over the relevant range of output for a natural monopoly, and therefore the firm would need a government subsidy to overcome losses.
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Oligopolies are difficult to analyze because
A) oligopolies are a recent development so economists have not had time to develop models. B) demand and cost curves do not exist for these types of industries. C) the firms are so large. D) how firms respond to a price change by a rival is uncertain.
A public good is nonrivalrous and excludable
a. True b. False Indicate whether the statement is true or false
In the long run, a monopolistically competitive firm produces at minimum average cost
a. True b. False Indicate whether the statement is true or false
An over-the-counter (OTC) market is:
A. made up of dealers who buy and sell for their customers and for their own accounts. B. made up of dealers who only sell government bonds. C. an example of a centralized market. D. made up of dealer who buy and sell only for their own accounts.