Adaptive expectation is a theory in which people look at current economic changes and adapt their beliefs and behavior almost immediately to such changes

The "New Deal" programs of the 1930s aimed at

(a) transforming American capitalism into a planned socialist economy. (b) introducing short-term measures to cure the depression but no fundamental changes in the American economy. (c) introducing measures to deal with the crises and cure the depression combined with measures to restructure important aspects of the economy and increase the role of government in it. (d) reintroducing laissez-faire policies (non-government intervention) like those that had worked in the 19th century.

Refer to the above figure. Regulators cannot force natural monopolies to operate in the long run at a loss. Therefore, they usually require the firms to charge a price equal to

A) marginal cost, which is P1. B) marginal cost, which is P2. C) average cost, which is P3. D) average cost, which is P4.