"If a natural monopoly is regulated using a marginal cost pricing rule, the firm makes zero economic profit." Is the previous statement correct or incorrect?
What will be an ideal response?
The statement is incorrect. If a firm is regulated using a marginal cost pricing rule, the firm incurs an economic loss.
You might also like to view...
Will scarce goods necessarily be rationed in some manner?
A) Not if people agree to share them equitably B) Not if there is enough for everyone to have what they need C) Not if their prices are free to rise D) Not if they are privately owned E) Yes
If the price level in the United States increases relative to prices in foreign countries, then
A. imports and exports of the United States will increase. B. imports and exports of the United States will decrease. C. imports of the United States will decrease and exports of the United States will increase. D. imports of the United States will increase and exports of the United States will decrease.