The rail system in Metropolis is a natural monopoly. If the government regulates the system by setting the fare equal to marginal cost, which of the following will be true?
a. Price and output will be higher than if the monopoly were unregulated.
b. Price and output will be lower than if the monopoly were unregulated.
c. Price will be lower and output higher than if the monopoly were unregulated.
d. Price will be higher and output lower than if the monopoly were unregulated.
e. Profit will be lower than if the monopoly were unregulated, but price and output could either increase or decrease.
C
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Refer to Table 4.2. If you choose to invest in Japanese bonds, your investment return from Scenario A will be
A) 1%. B) 3%. C) 4%. D) 7%.
In the steady state in the Solow growth model, the economy is in equilibrium with the capital-labor ratio and real GDP per worker ________, and with capital, labor, and real GDP ________
A) constant; constant B) growing; constant C) constant; growing D) growing; growing
Economic theory would lead us to suspect that deep sea oil reserves would be accessed before those located in the Middle East or on the U.S. mainland
a. True b. False Indicate whether the statement is true or false
Static tax analysis assumes
A) all of the present tax rates will be in place for a minimum of twenty years. B) changes in the tax rates have no effect on the tax base. C) changes in the tax rates have no effect on tax revenue. D) changes in the tax rates will change the tax base.