Refer to the figure above. If the monopolist is regulated to charge the fair-returns price for the profit-maximizing output it produces, ________
A) it makes a profit of $100
B) it makes a profit of $200
C) it makes a loss of $100
D) it makes zero profit
D
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In the context of the environment, the type of transactions costs that includes covering all the costs associated with the bargaining process, such as fees for attorneys, negotiators, and accountants, are called
A) search costs. B) collectivization costs. C) negotiation costs. D) monitoring and enforcement costs.
Opportunistic behavior may occur when
A) a firm buys its inputs from multiple suppliers. B) firms incur significant transaction costs when negotiating contracts. C) a firm backwards vertically integrates. D) a firm can buy a key component from only one supplier.
If a project costs $800 today and pays a return of $864 next year, what is the highest interest rate at which the project should be undertaken?
A) 6.4 percent B) 7 percent C) 8 percent D) 8.64 percent
Why is a bond considered to be a loan but a share of stock is not?
What will be an ideal response?