Solved

If the Government Regulates the Price That a Natural Monopolist

Question 495

Multiple Choice

If the government regulates the price that a natural monopolist can charge to be equal to the firm's marginal cost, the firm will


A) earn zero profits.
B) earn positive profits, causing other firms to enter the industry.
C) earn negative profits, causing the firm to exit the industry.
D) minimize costs in order to lower the price that it charges.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q155: When a monopolist increases the quantity that

Q202: In order for antitrust laws to raise

Q490: When a local grocery store offers discount

Q491: Figure 15-9 <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB1273/.jpg" alt="Figure 15-9

Q493: Figure 15-3 <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB1273/.jpg" alt="Figure 15-3

Q494: If the distribution of water is a

Q497: A monopolist maximizes profits by<br>A)producing an output

Q498: Table 15-8<br>The following table provides information on

Q499: Marginal revenue can become negative for<br>A)both competitive

Q500: Table 15-11<br>The following table shows quantity, price,