Regulation that is based on allowing prices to reflect only the actual operating cost of production is known as
A. cost-of-service regulation.
B. rate-of-return regulation.
C. average cost regulation.
D. marginal cost regulation.
Answer: A
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A self-correcting mechanism tending to bring a country's balance of payments into equilibrium exists under __________ exchange rate systems
A) fixed and floating B) floating, but not fixed C) fixed, but not floating D) neither fixed nor floating
Which of the following examples would most likely result in a decrease in demand with no immediate effect on supply?
a. A study shows that a brand of soft drink causes cancer. b. A study shows that eating olives significantly reduces heart disease. c. A drought has a devastating effects on the corn crop. d. A factory fire reduces the production of motorcycles.
An increase in Social Security payments to retired persons has what effect on equilibrium income?
A. GDP will fall. B. GDP will rise. C. GDP will remain the same. D. GDP will fall by less than the increase in payments.
A good is said to be overproduced in an economy if
A. the social marginal cost exceeds the social marginal benefit. B. the production of the good generates a positive externality. C. the marginal cost of producing the good is less than its price. D. the marginal benefit derived from the consumption of the good is more than the price.