Rate of return regulation is designed to allow a natural monopoly to

A) make an economic profit.
B) make zero economic profit.
C) underestimate its average cost.
D) compete with any firm entering the market.
E) make zero normal profit.


B

Economics

You might also like to view...

Which statement is false?

A. The 1990s was one of the most prosperous decades in the United States' history. B. The United States' economy reached its tenth year of steady expansion in the spring of 2001. C. Compared to other decades, the 1990s was a decade was unique in that it had strong economic growth with no recessions. D. At the end of the 1990s, the government was running budget surpluses.

Economics

Compare and contrast the tax base with the tax rate structure

What will be an ideal response?

Economics

Tim Tupper's term paper-typing business is a perfectly competitive firm in long-run equilibrium. Which of the following does not describes the firm's situation?

a. It will be minimizing average total cost. b. It will be charging a price equal to marginal cost. c. It will be charging a price equal to average total cost. d. It will be earning a normal profit. e. Entrepreneurs outside the industry will be eager to enter.

Economics

To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:

A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.

Economics