Use the above figure. Suppose that a regulatory agency requires this natural monopolist to engage in marginal cost pricing. This would lead to
A. profits, but new firms cannot enter the industry in the long run due to high barriers to entry.
B. losses, which would drive the monopolist out of business in the long run.
C. profits, which would encourage new producers to enter the industry in the long run.
D. losses, which would encourage the monopolist to lower costs in the long run.
Answer: B
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A) negative. B) equal to zero. C) positive and less than one. D) positive and greater than one. E) undefined because people always buy the same amount of food.
Which of the following is a normative statement?
a. The U.S. rate of unemployment was lower in 2004 than it was in 1994. b. Savings accounts earn interest, whereas checking accounts do not. c. Congress must recognize that the growing national debt is the most serious problem that the country faces. d. The unemployment rate increases when the percentage of the labor force without jobs increases. e. The unemployment rate among teenagers is higher than the rate among adults.
Classical economists believed that the best governmental policy is no policy at all
Indicate whether the statement is true or false
While it can be hard to measure, when it comes to education, _______________ around the world.
a. the psychic cost is high b. the level of suspicion is increasing c. the social rate of return is positive d. the purely private benefits outweigh the social benefits