Under rate-of-return regulation, average cost pricing

A) is inflated so the firm can make economic profits.
B) includes variable costs but not a cost for capital.
C) includes what they consider to be a fair rate of return on investment.
D) includes a cost for capital that generates an above normal rate of return.


C

Economics

You might also like to view...

The profit-maximizing rate of output for a firm in a perfectly competitive market is found where:

a. total revenue equals total cost. b. price equals average total cost. c. price equals marginal cost. d. marginal revenue equals price.

Economics

Economic discrimination and prejudice

A. are synonymous. B. must both exist in statistical discrimination. C. often occur together. D. are mutually exclusive.

Economics

Which of the following is an example of an investment in physical capital?

A. A firm purchases new equipment for a manufacturing process. B. A firm pays for workers to take college classes. C. A firm trains workers to operate new machinery. D. A chemical firm employs chemists to develop new chemicals.

Economics

Which of the following is NOT a reason for the increase in health care costs?

A. the aging of the population B. the decrease in the fertility rate C. the implementation of new technologies D. the increase in third party payments

Economics