Eliminating economic profit of a natural monopolist may be justifiable on the basis of society's equity goal.
Answer the following statement true (T) or false (F)
True
A monopoly is most likely to earn an economic profit due to market power and lack of competition. Although equity is subjective, the presence of economic profits may violate visions of equity.
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What is the result of differences in sustained economic growth rates over time?
a. Countries will eventually become economically equal. b. Some countries will become richer than others over time. c. Countries will stay at their current approximate levels of wealth. d. The differences between the wealth of countries will shrink, but not disappear.
Which of the following is true of implicit contracts?
A. The opportunity cost of residual loss is low. B. The gains from trade are low and there are market failures. C. Enforcement depends on the private incentives of individuals. D. Agents do not act in the best interest of principals.