Author Question: If government regulators force a natural monopoly to produce where price equals marginal cost, the ... (Read 160 times)

fagboi · **on:** Jun 30, 2018

If government regulators force a natural monopoly to produce where price equals marginal cost, the monopoly will earn
a. a fair return
b. positive economic profit
c. zero economic profit
d. negative economic profit
e. greater economic profit than if it were unregulated

Question 2

A firm in perfectly competitive industry is maximizing profit at Q = 3,000 . Then its fixed cost increases. The profit-maximizing output is now
a. greater than 3,000 and profit decreases
b. less than 3,000 and profit decreases
c. greater than 3,000 and profit is unchanged
d. equal to 3,000 and profit decreases
e. equal to 3,000 and profit increases