In theory, placing a price control on a natural monopoly should:
A. reduce deadweight loss to zero.
B. create negative economic profits for the company.
C. be easy for government to figure out because of easily accessible information.
D. have the same outcome as public ownership.
Answer: D
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Refer to Figure 16-5. Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the monopoly price
What is the revenue collected from the fixed fee portion of the price? A) $10,240 B) $7,870 C) $2,560 D) $1,440
According to the simple circular flow concept, whenever planned investment is greater than planned saving during periods of full employment, there is a tendency for
a. output to rise. b. prices to rise. c. employment to increase. d. government to regulate prices and wages.
From 1970 to 1998 the U.S. dollar
a. gained value compared to the Italian lira because inflation was higher in Italy. b. gained value compared to the Italian lira because inflation was lower in Italy. c. lost value compared to the Italian lira because inflation was higher in Italy. d. lost value compared to the Italian lira because inflation was lower in Italy.
In retaliation for U.S. support for Israel during the Arab-Israeli War, OPEC countries stopped selling oil to the United States. For the United States, this embargo caused the
A. demand curve for oil to shift out. B. demand curve for oil to shift in. C. supply curve of oil to shift out. D. supply curve of oil to shift in.