A local cable company has its rates set at P = $15 by a regulatory commission. Its current output is 10,000 households and its costs are as follows: ATC = $17; AVC = $14; and MC = $15 . From this, we can tell that this is:
a. a fair price, and the firm earns a normal profit.
b. a fair price, and the firm earns an economic loss.
c. marginal cost pricing, and the firm earns a normal profit.
d. marginal cost pricing, and the firm earns an economic loss.
e. the same price that an unregulated monopolist would charge.
d
Economics
You might also like to view...
The defining features of business cycles is that they
A. are inherently bad B. represent the underlying trend of real GDP C. are fluctuations about trend of real GDP D. measure prospects for future growth in the economy
Economics
The present value of receiving M dollars two years from now when the prevailing interest rate is i is equal to
a. M - i2 b. M ? i2 c. M/i d. M/(1 - i) e. M/(1 + i)2
Economics