In the above figure, if this natural monopolist were regulated and allowed to earn a "fair" rate of return, it would sell the product at the price

In the figure above, at the point where the price is $4 per cup the price elasticity of demand is

A) 2. B) 0.5. C) 1. D) 1.5. E) 0.

Suppose the U.S. government imposes a maximum price of $5 per gallon of gasoline, and the current equilibrium price is $3.50 per gallon. This policy represents a:

A) binding price floor. B) non-binding price floor. C) binding price ceiling. D) non-binding price ceiling.