Unregulated natural monopolists produce suboptimal rates of output.
Answer the following statement true (T) or false (F)
True
This flawed price signal (P > MC) is the cause of market failure. Consumers end up consuming less of this product (and more of other goods) than if they were charged the good's true opportunity cost. The result is a suboptimal mix of output.
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Who determines the open-market operations of the Federal Reserve System?
A) Board of Governors B) FDIC C) FHLBB D) FOMC
Between 1960 and 1997, the federal budget was never in surplus
a. True b. False Indicate whether the statement is true or false
The income effect of a price change is depicted by
a. a parallel shift of the budget constraint at the old set of prices. b. a parallel shift of the budget constraint at the new set of prices. c. a movement along the budget constraint holding the level of satisfaction constant. d. not observable and is therefore neither a shift nor a change in the slope of the budget constraint.
For a fixed target real interest rate and target inflation rate, when inflation increases, the Fed ________ interest rates, hence ________ short-run equilibrium output.
A. decreases; decreasing B. increases; increasing C. increases; decreasing D. decreases; increasing