Refer to the above figure. If the government uses rate-of-return regulation for the natural monopolist, the firm will charge price
A) P5 and sell Q1 units.
B) P2 and sell Q1 units.
C) P3 and sell Q3 units.
D) P1 and sell Q4 units.
C
You might also like to view...
Answer the next question(s) based on the following information for Manfred's Shoe Shine Parlor.Units of LaborTotal ProductMarginal ProductTotal Revenue00 11414$422 10 330 90435 539 1176 1267442132Assume Manfred hires labor, its only variable input, under purely competitive conditions. Shoe shines are also sold competitively. At what price does each shoe shine sell?
A. $1 B. $3 C. $2.50 D. $2
Ceteris paribus, as the price of a good or service increases
A) people will buy more of it. B) people will buy less of it. C) people will want less of it. D) people will want more of it.
Larger firms can produce a product at lower average cost than small firms when:
A. economies of scope exist. B. cost complementarities exist. C. diseconomies of scale exist. D. economies of scale exist.
A good that has social costs that are less than private costs has a quantity that is
A) too high. B) too low. C) just right. D) equal to zero.