Government-operated firms with monopoly power
a. will necessarily meet the criteria of economic efficiency, as long as price equals average total cost.
b. will always be more efficient than private firms because they do not have to make a profit.
c. are likely to be inefficient since some of the monopoly power is likely to serve the interests of the governmental managers and employees.
d. are highly responsive to changes in the preferences of individual consumers since consumers are also voters.
C
You might also like to view...
If the market for a product begins as perfectly competitive and then becomes a monopoly, there will be a reduction in economic efficiency and a deadweight loss
Indicate whether the statement is true or false
Medicare
A. subsidizes the care of middle aged people, which gives them an incentive to consume more medical services. B. subsidizes the care of older people, which gives them an incentive to consume more medical services. C. subsidizes the care of older people, which gives them NO incentive to consume more medical services. D. subsidizes the care of young people, which gives them an incentive to consume less medical services.
All of the following are part of the "state health insurance marketplaces" provision of the Patient Protection and Affordable Care Act (ACA) except
A) each state is required to establish an Affordable Insurance Exchange. B) small businesses with fewer than 50 employees are exempt from being required to participate in the program. C) low-income individuals are eligible for tax credits to offset the costs of buying health insurance. D) the marketplaces offer health insurance policies that meet certain specified requirements.
If demand is perfectly elastic, the absolute value of the price elasticity coefficient is
A) infinity. B) zero. C) one. D) equal to the absolute value of the slope of the demand curve.