It is not necessary to offer a subsidy in order to make price efficiency regulation viable in the long run.
Answer the following statement true (T) or false (F)
False
In a natural monopoly, MC is always less than ATC, which means a natural monopolist incurs a loss on every unit of output produced. If the government does not subsidize these regulated firms, they will ultimately exit the market.
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. A doubling of all prices has the same effect on the budget line as reducing income by half. 2. If the consumer's income doubles, then his optimal purchases of all goods will double. 3. If the consumer's income and all prices simultaneously triple, then his optimum will not change. 4. The slope of the budget line always equals the consumer's marginal value. 5. The budget line illustrates the consumer's opportunities and the indifference curve illustrates the consumer's preference.
For a natural monopoly, the marginal cost of producing an additional unit of its product is relatively small
Indicate whether the statement is true or false
When future labor income falls in a small open economy, it causes the current account to ________ and investment to ________
A) fall; rise B) rise; remain unchanged C) fall; remain unchanged D) rise; rise
In this graph of choice set, price change causes the slope of budget lines to change
Indicate whether this statement is true or false