Suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4. Answer the following question on the basis of this information. Refer to the information. The level of productivity is:

Firms buy new capital goods only if they expect this investment to yield:

a. a higher return than other possible uses of their funds. b. the same return as other possible uses of their funds. c. no return as compared to other uses of their funds. d. a lower return than other possible uses of their funds.

The reason an unregulated natural monopolist will produce at an economically inefficient quantity is

A) due to the fact that the monopolist will equate marginal cost with price to determine the output level. B) due to the fact that the monopolist will equate average total cost with price to determine the output level. C) that the price does not equal the true marginal cost of producing the good. D) that the monopolist will produce a quantity greater than the minimum of the average total cost curve.