If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then the price will be
A) $2.
B) $4.
C) $5.
D) $6.
B
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List all the influences on selling plans, and for each influence, say whether it changes supply
What will be an ideal response?
If the interest rate rises, a profit-maximizing firm will tend to
a. invest in more projects (such as new plants) with payoffs in the future. b. invest in fewer projects with payoffs in the future. c. increase both current output and future output. d. reduce both current output and future output.
What is the function of risk premium?
A. To compensate bondholders for the chance the borrower will not repay the loan. B. To raise the return to holding government bonds. C. To make sure that the value of the bond rises with inflation. D. To distinguish short from long-term bonds.
In order to practice any form of price discrimination, a monopoly must be able to
a. identify the maximum price that each customer is willing to pay. b. separate its customers into distinct groups. c. prevent resale of its product. d. establish a legal barrier to entry.