A rule that specifies the highest price that a regulated firm is permitted to set is called
A) rate of return regulation.
B) price cap regulation.
C) maximum price regulation.
D) average/marginal cost pricing.
B
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Education confers positive externalities because
a. some education is done outside the market (i.e., in public schools) b. curricula are regulated by the government, even in private schools c. an educated person consuming education gains many benefits he or she did not expect when the process started d. an educated person who has consumed education usually behaves in a way that benefits others e. education gives benefits to individuals in excess of the costs they pay to get it
Consider someone who borrows $10,000 to buy a car at a fixed interest rate of 9%. If inflation is 3% at the time the loan is made, what is the real interest rate at which the loan must be repaid, and to what level would the interest rate have to rise for the real interest rate on the loan to be zero?
a. 4.5%; 7.5% b. 6; 9% c. 8%; 10% d. 6; 12%