If a natural monopoly is allowed to set its price above its average total cost, then
A) the company makes an economic profit.
B) the company incurs an economic loss.
C) competitors will enter the market.
D) the company will produce more than the efficient amount of output.
A
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A student is studying for an exam 2 hours a day and is debating whether to study an extra hour. The student's marginal benefit
A) depends on the grade the student earns on the exam. B) is the benefit the student receives from studying all 3 hours. C) is the benefit the student receives from studying the extra hour. D) is greater than the student's marginal cost.
Use the law of diminishing marginal utility to explain why a pizza parlor might price pizzas in the following way: "Buy one pizza for $12, get the second pizza for $6." Why not simply charge $9 per pizza instead?
Your mother tells you, "Watching ten hours of TV per day will make you stupid." This is a positive statement because: a. your mother says it with a positive tone in her voice. b. it is your mother's opinion
c. it is a proposition that can be tested. d. your mother is only thinking of your best interest.
Which of the following events could explain an increase in interest rates together with an increase in investment?
a. The government runs a larger deficit. b. The government institutes an investment tax credit. c. The government replaces the income tax with a consumption tax. d. None of the above is correct.