A monopolistic firm
A) will never sell a product whose demand is inelastic at the quantity sold.
B) can sell as much as it wants for any price it determines in the market.
C) cannot determine the price, which is determined by consumer demand.
D) cannot sell additional quantity unless it raises the price on each unit.
E) will always earn a profit in the long run.
A
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Life insurance companies are regulated by state governments because
A) they have never experienced bankruptcy. B) they have never experienced profitability. C) they have never experienced widespread failures. D) they hold only highly liquid assets.
One undesirable effect of social regulation is that it
A) affects smaller firms disproportionately, creating anticompetitive effects. B) destroys incentives for firms to engage in marginal cost pricing. C) raises prices of goods to consumers, while lowering prices to business and special interest groups. D) reduces the effectiveness of economic regulation.