Under the social interest theory of regulation, the goal of regulating natural monopolies is
A) to provide a larger, though not maximum, profit for the firms.
B) to use average cost pricing.
C) to provide an outcome similar to the competitive outcome.
D) to provide a the maximum profit for the firms.
E) None of the above answers is correct.
C
You might also like to view...
Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. What is the value of consumption in equilibrium?
A) 32 B) 80 C) 240 D) 320
When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________
A) falls; increases B) falls; does not change C) rises; decreases D) rises; increases E) falls; decreases
"Dad said he'd pay for my education whether I go to State or to Ivy College. So I chose Ivy College, even though it'll cost him $15,000 more in tuition each year!" Pick the correct statement:
A) Her opportunity cost is $15,000 each year. B) Her opportunity cost is the satisfaction she would have experienced at State. C) Whether she realizes it or not, her opportunity cost is infinite, just like her dad's love is infinite. D) She has no opportunity cost, because her dad will pay for her education.
Your friend notices that U.S. auto production and U.S. population growth have moved together over several decades. He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production. You gently point out to him that he
a. is correct only when the economy is in a recession b. has mistakenly inferred causation from observed correlation c. has ignored secondary effects d. has committed the fallacy of composition e. is correct only when the United States enjoys economic growth