Regulatory commissions may focus on establishing a "fair-return" price to be charged by a monopolist. Under this policy, the monopolist would earn:
A. positive economic profits.
B. zero economic profits.
C. negative economic profits.
D. monopoly profits.
Answer: B
You might also like to view...
Refer to Horizontal Merger. As a consequence of the merger, consumers lose surplus equal to
The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.
a. Area A + B.
b. Area C + D.
c. Area C + D + E.
d. Area G.
Between 1950 and 2015 the productivity of wheat farmers in the United States more than doubled. This means that
A) the total amount of wheat produced more than doubled. B) the amount of land and other resources devoted to wheat production more than doubled. C) the amount of wheat produced by the average farmer more than doubled. D) the incomes of wheat farmers more than doubled.
Jill, a bookkeeper, just received an attractive offer from an outside firm and so she asks for a raise from her current employer. If the management of Jill's company is aware of the offer, her raise request is more likely to be
a. Accepted b. Rejected c. Laughed at d. All of the above
The optimal level of pollution is:
a. the level at which the marginal social cost of air quality equals the marginal social benefit. b. the level at which the average social cost of air quality equals the average social benefit. c. the level at which the total social cost of air quality equals the total social benefit. d. zero.