To Allow a Public Utility (Which Is a Natural Monopoly)to

question 15

Multiple Choice

To allow a public utility (which is a natural monopoly) to earn only a normal profit, the government should

• A)do all of the following
• B)set price equal to average cost
• C)equate marginal cost and average cost
• D)set marginal cost equal to marginal revenue
• E)set price equal to marginal cost

Comprehend the concept of market equilibrium and the forces that lead to market adjustment.

Understand the rationing function of prices in a market economy.

Analyze the economic consequences of imposing tariffs and their impact on trade quantities.

Appreciate the complexities involved in ticket scalping and its relation to market prices.

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Definitions:

RDBMS

Relational Database Management System, a type of database management system that stores data in tables with relationships between them.

DBMS

Acronym for Database Management System, a software system designed to store, manage, and retrieve data from databases.

Browser

Software used to access and navigate the Internet, displaying web pages and facilitating online communication.

Birthdate

The exact date when a person was born, typically expressed as day, month, and year.