When regulating a natural monopoly, government officials
a. can set an efficient price, but the firm will suffer a loss
b. can arrange a Pareto improvement by leaving the firm alone
c. should force the firm to set a price equal to minimum marginal cost
d. should force the firm to set a price equal to minimum long-run average total cost
e. will increase efficiency if they force the firm to produce where MR = MC.
A
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If a firm can borrow or lend at a 10 percent annual interest rate, it will
a. buy all units of capital with a marginal rate of return above 10 percent b. buy all units of capital with an average rate of return above 10 percent c. buy all units of capital with a marginal rate of return below 10 percent d. buy all units of capital with an average rate of return below 10 percent e. select only the unit of capital with the highest marginal rate of return, assuming it is above 10 percent
Predatory pricing is a form of barrier to entry
Indicate whether the statement is true or false