Which of the following explains why the marginal cost pricing rule results in an economic loss for a natural monopoly?
A) The ATC curve is downward sloping throughout the relevant range, therefore the MC is lower than the ATC.
B) The demand curve is downward sloping, therefore price falls as quantity increases.
C) The MC is constant and equal to price.
D) Because output is determined by setting MC equal to the price, consumer surplus is maximized.
E) The firm's MR is always less than its price.
A
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Data collected on the same observation unit at a number of points in time are called:
A) cross-section data. B) time series data. C) panel data. D) none of the above.
Which of the following is NOT a reason that interest rates remained low despite high budget deficits following the financial crisis?
A) increased demand for U.S. government bonds B) the perceived riskiness of alternative investments such as stocks C) low interest rates on CDs and similar short-term assets D) increases in expected inflation
The proper level of government intervention is unclear when dealing with a monopoly
a. True b. False Indicate whether the statement is true or false
Which of the following is an accurate comparison between graph 1 and graph 2?
a. Changes in demand cause less of a shift in equilibrium points in graph 1 than in graph 2.
b. Changes in demand cause more of a shift in equilibrium points in graph 1 than in graph 2.
c. Changes in demand will increase RGDP more in graph 1 and price more in graph 2.
d. Changes in demand will increase price more in graph 1 and RGDP more in graph 2.