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 force the firm to incur a loss. This is not possible.

Economics

You might also like to view...

Chain-weighted price indices are constructed such that

A) all years' levels of GDP are directly related to a base year level of GDP. B) prices of one good can be directly compared with prices of other goods. C) prices in different years can be directly compared with one another. D) prices in different economies can be directly compared with one another.

Economics

In the United States, the powers of eminent domain are put forth in the Fifth Amendment to the Constitution

Indicate whether the statement is true or false

Economics

The equation of exchange

A) is MV = PY. B) becomes the quantity theory if velocity and the price level are constant. C) cannot be used in an economy with inflation. D) All of the above answers are correct.

Economics

A firm’s average fixed cost

A. does not vary with output. B. decreases as output rises. C. is equal to average cost when average cost is minimized D. causes marginal cost to rise as output rises.

Economics