A natural monopoly
A) faces more competition after regulation.
B) might exaggerate its costs if it is regulated using rate of return regulation.
C) might falsely minimize its costs if it is regulated using rate of return regulation.
D) might falsely minimize its costs if it is regulated using a marginal cost pricing rule.
E) is allowed to maximize its profit under a marginal cost pricing rule.
B
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Explain why greater equality is inevitably gained at the expense of efficiency
If uncertainty causes commercial banks to increase their holdings of excess reserves, other things constant, this will
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The market supply curve indicates the total quantity all producers in a competitive market would produce at each price,
A. allowing all supply shifters to vary. B. holding all supply shifters fixed. C. holding only input price fixed. D. allowing input price to vary.