« previous next »

Author Question: When electric utilities are regulated using an average cost pricing rule, they will earn zero ... (Read 50 times)

Jkov05

  • Hero Member
  • *****
  • Posts: 556
on: Jun 29, 2018
When electric utilities are regulated using an average cost pricing rule, they will earn zero economic profit. Is the previous statement correct or incorrect? Why?
 
  What will be an ideal response?

Question 2

The value of the marginal product of labor is given by:
 
  A) the ratio of the marginal product of labor to the wage rate.
  B) the product of the marginal product of labor and the wage rate.
  C) the ratio of the marginal product of labor to the price of the final good produced.
  D) the product of the marginal product of labor and the price of the final good produced.


AISCAMPING

  • Sr. Member
  • ****
  • Posts: 347
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is correct. An average cost pricing rule requires that the firm set its price equal to its average total cost. When price equals average total cost, the firm earns zero economic profit.

Answer to Question 2

D


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Egg cells are about the size of a grain of sand. They are formed inside of a female's ovaries before she is even born.

Did you know?

Blood in the urine can be a sign of a kidney stone, glomerulonephritis, or other kidney problems.

Did you know?

Symptoms of kidney problems include a loss of appetite, back pain (which may be sudden and intense), chills, abdominal pain, fluid retention, nausea, the urge to urinate, vomiting, and fever.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Average winter rainfall and variation in rainfall among sites inhabited by Suromalus ater Average winter rainfall and variation in rainfall among sites inhabited by Suromalus ater
Although average brain size increases gradually though time in H. erectus, individuals with small br Although average brain size increases gradually though time in H. erectus, individuals with small br
A typical electric cooling fan assembly after being removed from the vehicle. A typical electric cooling fan assembly after being removed from the vehicle.
Right-hand Rule Right-hand Rule
How to use Cramer's rule to solve a second-order determinant (Question 1) How to use Cramer's rule to solve a second-order determinant (Question 1)
When operating your own business, it is wise to know your cost of capital and that of the ... When operating your own business, it is wise to know your cost of capital and that of the ...
Video: Mechanisms of capillary exchange (transcytosis & bulk flow)

For a complete list of videos, visit our video library