How should a natural monopoly be regulated under the social interest theory of regulation?
A) by setting price equal to the average cost of production
B) by allowing a price that maximizes the profit of the natural monopoly
C) by using a marginal cost pricing rule
D) by subsidizing other producers to compete with the monopoly
E) by using rate of return regulation
C
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If an economy is allocatively efficient, it must be producing
A) beyond its production possibilities frontier. B) inside its production possibilities frontier. C) on its production possibilities frontier. D) the goods and services that are the most expensive. E) the goods and services that are the least expensive to produce.
Suppose that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ________. Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is ________
A) 9 percent; 10 percent B) 10 percent; 9 percent C) 10 percent; 11 percent D) 11 percent; 10 percent