A fair price for a regulated monopoly is for the regulatory commission to set price equal to

Firefighters are highly skilled workers who are typically employed by city governments. If a city reduces the wage rate paid to firefighters to be less than the equilibrium wage rate, what happens to the economic rents earned by the firefighters?

A) Increase B) Decrease C) Remain unchanged D) Public employees like firefighters cannot earn economic rents

If aggregate demand turns out to be higher than what was anticipated in an economy, then:

a. the economy experiences a contractionary gap. b. the short-run equilibrium occurs at the potential output. c. the short-run equilibrium occurs at an output level lower than potential output. d. the short-run equilibrium occurs at an output level higher than potential output.