One reason why it is difficult to regulate a natural monopoly is
a. the lack of relevant economic theory
b. determining what price the firm is actually charging its customers
c. determining the appropriate side payment
d. an information problem — the monopoly's managers have an incentive to overstate costs
e. an information problem — the monopoly's managers have an incentive to overstate revenues
D
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The figure above shows that monopoly is ________ because it produces a level of output at which ________
A) inefficient; marginal benefit equals marginal cost B) efficient; marginal benefit equals marginal cost C) efficient; marginal benefit exceeds marginal cost D) inefficient; marginal benefit exceeds marginal cost E) efficient; producer surplus is maximized
According to the monetarists, when the expected rate of inflation rises, the short-run Phillips curve
a. shifts upward. b. shifts downward. c. is unaffected. d. None of the above