When economists assume that people are rational and respond to incentives, they mean
A) people act with kindness. B) people act in their own self-interest.
C) people are altruistic. D) people are selfish.
B
Economics
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If a natural monopoly does not inflate its costs, the output it produces is the smallest when the monopoly is
A) left unregulated. B) regulated according to an average cost pricing rule. C) regulated according to a marginal cost pricing rule. D) regulated to maximize total surplus.
Economics
In a Bertrand model, market power is a function of
A) marginal cost. B) the number of firms. C) price elasticity of supply. D) product differentiation.
Economics