If the government forces a natural monopoly to produce the output level at which P = MC, the firm will
A. Produce where ATC is at a minimum.
B. Fail to produce efficiently.
C. Produce less than the profit-maximizing level of output.
D. Incur losses.
Answer: D
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In the figure above, the single-price, unregulated monopoly sets a price of
A) $80 per unit. B) $60 per unit. C) $40 per unit. D) $0 per unit.
Taxes are one method of funding the poverty alleviation programs by the government. Which of the following is an important impact of taxes?
a. Taxes increase workers' incentives to work for longer hours. b. Taxes raise the disposable income of the workers. c. Imposition of taxes makes the government popular among the people. d. Taxes reduce the opportunity cost of leisure. e. Taxes reduce the demand for labor.
The value and cost of goods are easiest to determine when the goods are
a. common resources. b. public goods. c. club goods. d. private goods.
When it comes to ________ goods, it is important to remember only one level of output can be realized and consumers are ________ for that level.
A. public; willing to pay different amounts B. private; only willing to pay the same amount C. public; only willing to pay the same amount D. private; willing to pay different amounts