Forcing a natural monopoly to charge P = MC will not work
Indicate whether the statement is true or false
True . Since marginal cost is below average cost for a natural monopoly, this would be equal to forcing the firm to incur a loss. This is not possible.
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All of the following are associated with a mixed economy except
A. some public influence over the workings of free markets. B. public ownership mixed in with private property. C. public ownership of the society’s productive resources. D. different countries blending the state and market sectors in different ways.
Exhibit 30-2
?
A. It is the quantity of output at which marginal social benefits (MSB) equal marginal private benefits (MPB). B. It is the quantity of output at which MPB > MSB. C. It is the market output-the quantity of output that exists if the external benefits associated with the positive externality are not taken into account. D. It is the socially optimal output-the quantity of output that exists if the external benefits associated with the positive externality are taken into account. E. none of the above
Suppose the daily demand for Coke and Pepsi in a small city are given by QC = 90 - 100PC + 400(PP - PC) and QP = 90 - 100PP + 400(PC - PP), where QC and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can for both Coke and Pepsi. What is the Nash equilibrium price for Coke?
A. $0.016 B. $0.45 C. $0.53 D. $0.38
So long as a monopolist finds itself in the situation where price is greater than average fixed cost at the profit-maximizing (loss-minimizing) level of output, the firm should continue to operate to minimize its losses
Indicate whether the statement is true or false