When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly
a. will experience a loss.
b. will experience a price below average total cost.
c. may rely on a government subsidy to remain in business.
d. All of the above are correct.
d
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In an open economy, the government purchases multiplier will be smaller the
A) larger the marginal propensity to consume. B) smaller the marginal propensity to import. C) larger the tax rate. D) All of the above are correct.
Which of the following is true regarding managerial diseconomies?
A) Managerial diseconomies incentivize vertical integration. B) Managerial diseconomies are a cost associated with vertical integration. C) Managerial diseconomies incentivize backward integration. D) Managerial diseconomies incentivize forward integration.
In a monopolistically competitive market,
a. strategic interactions among the firms are very important. b. the threat of entry by new firms is not an important consideration. c. the attainment of a Nash equilibrium is an important objective. d. firms may enter even though they will earn zero economic profit in the long run.
What tool of monetary policy would the Fed most likely use to increase the federal funds rate from 1 percent to 1.25 percent?
A. The discount rate B. Margin requirements C. Open-market operations D. A change in reserve requirements