Describe the three main options available to a corporation when it needs to raise money so that it can invest in a new product or a new manufacturing technique
First, the firm could go to the bank to borrow money. Second, it can borrow money by issuing a bond. Third, it can sell or issue stock in the company.
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The theory that regulation helps producers to maximize profit is the
A) social interest theory. B) consumer surplus theory. C) antitrust theory. D) capture theory. E) oligopoly theory of regulatory bodies.
A firm that is a natural monopoly
A) can supply the entire market at a lower average total cost than two or more firms. B) has very small fixed costs and very large marginal costs. C) is infrequently regulated because having one firm serve the market is economically sound. D) cannot make an economic profit if it is not regulated because it must serve a very large customer base. E) produces the efficient quantity of output when it is not regulated.