If a public service commission requires a natural monopoly to set its price equal to the long-run marginal cost, this will result in

A) excessive economic profits to the monopoly.
B) normal economic profits to the monopoly.
C) losses to the monopoly.
D) either economic profits or losses, depending on the efficiency of the monopoly.


Answer: C

Economics

You might also like to view...

You are a lobbyist hired by a less developed country to try to prevent a developed country from increasing trade barriers against labor-intensive manufactured imports such as textiles

Make your case, arguing from both developed and developing country perspectives, in terms of who gains and who loses.

Economics

If Tom wants to not be hit, what strategy could he follow

a. Threaten to not tell b. Always not tell c. Threaten to tell d. All of the above

Economics

Regulation of industry is usually carried out by special government agencies that administer and interpret the law

a. True b. False Indicate whether the statement is true or false

Economics

As disposable income goes up, the:

A. average propensity to consume falls. B. average propensity to save falls. C. volume of consumption declines absolutely. D. volume of investment diminishes.

Economics