If a public utility is subject to average-cost pricing ...

[lilldybug07]

If a public utility is subject to average-cost pricing regulation, it will:
 a. earn a normal rate of return.
 b. produce the socially efficient level of output.
  c. suffer economic losses without a subsidy.
 d. earn an above-normal rate of return.

Question 2

Suppose that the world price of kiwi fruit (10 per box) is below the domestic price (12 per box). A tariff of 1 per box would:
 a. cause foreign producers to be better off, because the price they charge is now higher by 1 per box.
  b. cause domestic producers to be worse off by 5 per box.
  c. make domestic consumers worse off as they would be paying 1 more than the domestic price.
  d. make domestic consumers pay 1 more than the free trade price, but still 1 less than the domestic price.
  e. cause domestic producers to be worse off by 10 per box.

[kishoreddi]

Answer to Question 1

a

Answer to Question 2

d

[lilldybug07]

TYSM

[Joy Chen]

Excellent