This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If Michigan's electric utilities were allowed to use marginal cost pricing, it would lead to ... (Read 91 times)

Hungry!

  • Hero Member
  • *****
  • Posts: 1,071
on: Jun 29, 2018
If Michigan's electric utilities were allowed to use marginal cost pricing, it would lead to economic profits for these utilities. Is the previous statement correct or incorrect? Explain your answer.
 
  What will be an ideal response?

Question 2

The used car market has a significant amount of adverse selection because
 
  A) the seller knows more about the car than the buyer.
  B) the buyer can easily find out more about the car than the seller.
  C) buyers and sellers rarely have enough information.
  D) the transaction costs of the used car market are prohibitive.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

marict

  • Sr. Member
  • ****
  • Posts: 304
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect. Imposing marginal cost pricing on natural monopolies results in the firms incurring economic losses not economic profits.

Answer to Question 2

A


Hungry!

  • Hero Member
  • *****
  • Posts: 1,071
Reply #2 on: Jun 29, 2018
Thank you :)


marict

  • Sr. Member
  • ****
  • Posts: 304
Reply #3 on: Jun 29, 2018
Happy to help you


« previous next »
 

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

Did you know?

As of mid-2016, 18.2 million people were receiving advanced retroviral therapy (ART) worldwide. This represents between 43–50% of the 34–39.8 million people living with HIV.

Did you know?

This year, an estimated 1.4 million Americans will have a new or recurrent heart attack.

A graphical representation of the marginal value theorem. A graphical representation of the marginal value theorem.
An exploded view of a gerotor electric fuel pump. An exploded view of a gerotor electric fuel pump.
To test the normally open contacts, connect one meter lead to terminal 30 and the other lead to ... To test the normally open contacts, connect one meter lead to terminal 30 and the other lead to ...
A typical electric motor-driven AIR pump. This unit is on a Chevrolet Corvette and only works when ... A typical electric motor-driven AIR pump. This unit is on a Chevrolet Corvette and only works when ...
Marginal Supply - Demand Curve Marginal Supply - Demand Curve
Lead leaching from electronic waste (e-waste) Lead leaching from electronic waste (e-waste)
Video: Regulation of GFR: three methods, autoregulation & autoregulation via myogenic mechanism

For a complete list of videos, visit our video library