In regulated industries, the optimal regulation is to set price such that MC=P

In surveying their alumni, State U's economics department discovered that ramen noodle consumption declined once students graduated and found jobs. One conclusion the survey team might draw from this result is that:

A. ramen noodles are an inferior good. B. there is excess demand for ramen noodles. C. college graduates have a high reservation price for ramen noodles. D. the equilibrium price for ramen noodles is too high.

The manufacturer of Beanie Baby dolls used quarterly price data for 2005 I - 2013 IV (t = 1, ..., 36) and the regression equationPt = a + bt + c1D1t + c2D2t + c3D3tto forecast doll prices in the year 2014. Pt is the quarterly price of dolls, and D1t, D2t, and D3t are dummy variables for quarters I, II, and III, respectively. Using the estimated time-series regression, predicted price in the 1st quarter of 2014 is

A. $37.60. B. $45.60. C. $53.60. D. $56.00. E. none of the above