If the government requires a natural monopoly to price at marginal cost:
a. monopoly firms will earn zero economic profits because the price of the good equals the cost of producing that good.
b. monopoly firms will operate at a loss because P < AC.
c. more firms will be able to enter the market.
d. producer surplus will increase because quantity supplied is greater.
b
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When Fitness Team leased a commercial building from Land Co., it meant ______.
a. Fitness Team can use the property for a certain period of time b. Fitness Team owns the property and can transfer possession c. Land Co. becomes a part owner of Fitness Team d. Land Co. gives up all ownership rights to the property
Based on the graph showing how the subprime share of home mortgages grew rapidly before the big decline, the share of subprime loans began its steepest climb ______.
a. about the same time adjustable mortgage rates bottomed-out
b. about three years after adjustable mortgage rates bottomed-out
c. about three years before adjustable mortgage rates bottomed-out
d. about the same time adjustable mortgage rates began to decrease