The main purpose of industrial regulation is to:
A. lower price to marginal cost.
B. lower price to average total cost such that the firm earns a fair return.
C. break monopolies into competing firms.
D. reduce X-inefficiency.
Answer: B
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After a major ice storm left 90,00 . New York utility customers without power in January 1998, generators that normally sold for $500 were being sold for as much as $3,000 . New York law prohibits raising prices for necessities in emergency situations
Elevated prices prompted the State Attorney's office to promise to prosecute price gougers. a . Explain how this law prevents markets from clearing. Does it create a price floor or a price ceiling? b. How might antiprice gouging legislation actually work to keep people cold longer?
An asset's liquidity refers to its ability to be:
A. Bought and stored B. Increasing in value over time C. Used and enjoyed D. A means of payment