Refer to the above figure. Regulators cannot force natural monopolies to operate in the long run at a loss. Therefore, they usually require the firms to charge a price equal to
A) marginal cost, which is P1.
B) marginal cost, which is P2.
C) average cost, which is P3.
D) average cost, which is P4.
C
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If people stand to produce at lower cost when specializing and producing in larger quantities
a. they cannot gain from trade because each one is just as potentially productive as another. b. they cannot gain from trade because most people's wants can be easily satisfied with what they can produce themselves. c. they cannot gain from trade if they have similar tastes. d. they can gain from trade by specializing and increasing productivity.
The equation of exchange is written as
a. M × V = P × Y. b. M × P = V × Y. c. M × Y = P × V. d. M × Y = Y × P.
During the Great Depression, the United States economy operated ______________ the production possibilities frontier.
Fill in the blank(s) with the appropriate word(s).
Expected value represents
A) the actual payment one expects to receive. B) the average of all payments one would receive if one undertook the risky event many times. C) the payment one receives if he or she makes the correct decision. D) the payment that is most likely to occur.