Author Question: When promoting average cost pricing, regulators A) include what they consider to be a normal rate ... (Read 53 times)

Diane · **on:** Jun 29, 2018

When promoting average cost pricing, regulators

A) include what they consider to be a normal rate of return on investment.
B) encourage firms to produce at the output level where price equals marginal cost.
C) fail to consider a return to investors, so regulated firms often have a hard time raising investment funds.
D) inflate costs so much that price ends up as large as would prevail under unregulated monopoly.

Question 2

Because there are low barriers to entry in a monopolistically competitive market

A) there are many firms in the industry.
B) they produce a homogeneous product.
C) the firms are price takers.
D) there is no non-price competition.