Question

If a regulatory commission forces a natural monopoly to charge a price equal to its average total cost: A) output will decrease. B) the monopolist will realize a normal profit. C) resource allocation will worsen. D) the firm will earn an economic profit. If a regulatory commission wants to provide a natural monopoly with a fair return, it should establish a price that is equal to: A) minimum average fixed cost. B) average total cost. C) marginal cost. D) marginal revenue. After adjusting for taxes and transfers for the income distribution for the United States, the Gini coefficient: A) rises. B) gets closer to 1. C) is 0. D) declines.

          If a regulatory commission forces a natural monopoly to charge a price equal to its average total cost: A) output will decrease. B) the monopolist will realize a normal profit. C) resource allocation will worsen. D) the firm will earn an economic profit.

If a regulatory commission wants to provide a natural monopoly with a fair return, it should establish a price that is equal to: A) minimum average fixed cost. B) average total cost. C) marginal cost. D) marginal revenue.

After adjusting for taxes and transfers for the income distribution for the United States, the Gini coefficient: A) rises. B) gets closer to 1. C) is 0. D) declines.

Added by Jasmin C.

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