Rate of return regulation is most similar to
A) a marginal cost pricing rule.
B) an average cost pricing rule.
C) an average variable cost pricing rule.
D) an inflation cost pricing rule.
B
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Finance companies
A) issue stock and use the proceeds to purchase bonds. B) raise funds in financial markets to lend to households and firms. C) raise funds from banks to lend to households and firms. D) issue bonds and use the proceeds to purchase stock.
The economy could produce at 8 units of outboard motors and 18 units of robots
A. immediately only under unusual circumstances such as war.
B. if there is economic growth over a period of years.
C. under no circumstances.
D. immediately only under unusual circumstances such as war AND if there is economic growth over a period of years.
In the long run, the price level adjusts
A) to achieve money market equilibrium. B) so that the inflation rate equals the growth rate of real GDP. C) so that the inflation rate equals zero. D) so that the inflation rate is moderate. E) so that the real interest rate equals the nominal interest rate.
Consider a monopolistically competitive firm that is earning profits in the short run. Which of the following changes will this firm experience in the long run? a. The demand for the good produced by the firm will increase
b. The number of competitors faced by the firm will decrease. c. The market price of the good sold by the firm will decrease. d. The marginal cost of production incurred by the firm will reduce to zero.