Figure 3-16

For a perfectly competitive market in which firms face an identical constant marginal costs, the amount of consumer surplus increases if

A) market demand decreases. B) market demand increases. C) marginal cost increases. D) none of the above: insufficient information to answer.

The type of regulation that attempts to keep prices and the rate of return in an industry at a competitive level is referred to as

A) cost-of-service regulation. B) rate-of-return regulation. C) service-opportunity regulation. D) natural regulation.