Refer to the diagram for a natural monopolist. If a regulatory commission set a maximum price of P 2 , the monopolist would:
A. produce output Q 1 and realize an economic profit.
B. produce output Q 3 and realize an economic profit.
C. close down in the short run.
D. produce output Q 3 and realize a normal profit.
D. produce output Q 3 and realize a normal profit.
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Interlace, Inc produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. Interlace, Inc is definitely
A) a perfectly competitive firm. B) not a perfectly competitive firm. C) a natural monopoly. D) None of the above answers is correct.
Which of the following is true of technology?
a. Technological improvements are less important today than was true in the past. b. Lack of access to modern technology is a major barrier restraining the growth of low-income countries. c. Often, perverse institutions and policies in low-income countries undermine the potential gains from adoption of modern technology. d. Countries with high investment rates will be unable to apply modern technology effectively.