Under rate-of-return regulation, the price is set so that A) ...

[serike]

Under rate-of-return regulation, the price is set so that
 
  A) price equals the marginal cost of production.
  B) the firm earns a positive economic profit.
  C) the firm earns a monopoly profit.
  D) the firm earns a normal rate of return on investment.

Question 2

In the above figure, this profit-maximizing monopolistic competitive firm will realize an economic profit of
 
  A) -1,400.
  B) 2,100.
  C) 1,400.
  D) 700.

[sultansheikh]

Answer to Question 1

D

Answer to Question 2

D

[serike]

Excellent

[ktidd]

TYSM