Suppose the local government is considering using marginal cost pricing to set rates for a cable TV company. Which of the following arguments supports marginal cost pricing?
a. Marginal cost pricing gives the monopoly economic profit and a reason to stay in business.
b. Marginal cost pricing gives the firm a normal economic profit and a reason to stay in business.
c. Marginal cost pricing is allocatively efficient.
d. Average cost pricing requires subsidies, which can be costly.
e. Average cost pricing forces monopolies to operate at a loss.
C
You might also like to view...
A merger between firms in which one firm purchases an input from the other is called a
A) conglomerate merger. B) horizontal merger. C) vertical merger. D) none of the above.
Which of the following countries has the highest output per capita?
a. The United Kingdom b. The United States c. France d. Italy e. Germany
One reason the demand curve slopes ________ is that as prices fall ________.
A. upward; more people find that the price is now less than their reservation price B. downward; fewer people find that the price is now less than their reservation price C. downward; more people find that the price is now less than their reservation price D. upward; fewer people find that the price is now less than their reservation price
Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: Cars SoldTrucks SoldLarry105Joe99Ralph312 Based on last month's data, ________ has an absolute advantage in selling cars and ________ has an absolute advantage in selling trucks.
A. Larry; Ralph B. Ralph; Larry C. Larry; Joe D. Joe; Joe