Price-cap regulation not only motivates cost control, it can also motivate socially desirable pricing
Indicate whether the statement is true or false
T By breaking the monopoly's demand curve connection between price and quantity, price-cap regulation can motivate an approach to Ramsey pricing.
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Suppose new oil reserves are discovered that were not previously known. What happens to the user cost of oil?
A) Decreases B) Increases C) Remains the same D) May increase or decrease, depending on the discount rate
Demand-pull inflation is
A) inflation caused by increases in aggregate demand that generate an even larger increase in aggregate supply. B) inflation caused by increases in aggregate demand that are not matched by increases in aggregate supply. C) inflation caused by reductions in short-run aggregate supply. D) inflation caused by reductions in long-run aggregate supply.