Use the above figure. Suppose that a regulatory agency requires this natural monopolist to engage in marginal cost pricing. This would lead to
A) losses, which would drive the monopolist out of business in the long run.
B) profits, which would encourage new producers to enter the industry in the long run.
C) profits, but new firms cannot enter the industry in the long run due to high barriers to entry.
D) losses, which would encourage the monopolist to lower costs in the long run.
A
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The German government carries out an official foreign exchange intervention in which it uses dollars held in an American bank to buy French currency from its citizens. How is this accounted for in the balance of payments?
A) current account, French good export B) current account, German good import C) financial account, French asset export D) financial account, German asset export E) financial account, German asset import
The demand curve for a monopolist differs from the demand curve faced by a competitive firm because the demand curve for:
A. a monopolist is the market demand curve. B. a monopolist lies below its marginal revenue curve. C. a competitive firm lies above its marginal revenue curve. D. a competitive firm is inelastic.