A major criticism of industrial regulation is that:
A. it has been applied to virtually all major U.S. corporations in the post-Second World War
period.
B. marginal cost pricing has created an underallocation of resources.
C. by allowing a fair return price, it gives natural monopolists little incentive to contain costs.
D. regulatory commissions have frequently caused natural monopolies to go bankrupt.
Answer: C
Economics
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Refer to Figure 8A.2. An increase in the saving rate is represented by
A) a movement from e2 to e1. B) shifting from s1Y to s2Y. C) a movement from K1 to e1. D) shifting from s2Y to dK.
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Refer to Figure 9.2. At price 0H and quantity Q1, producer surplus is the area
A) 0ABQ1. B) 0EDQ1. C) AHB. D) 0FGQ1. E) none of the above
Economics