If Regulation of a Monopoly Results in a Price Equal

question 98

Multiple Choice

If regulation of a monopoly results in a price equal to marginal cost, but price is below average total cost:

• A) the firm can still make an economic profit.
• B) the firm will earn only a zero economic profit.
• C) efficiency in allocation will be less.
• D) the firm will require subsidization or it will go out of business.

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Definitions:

Organizational Politics

The activities and behaviors individuals engage in within a workplace to gain power, influence decisions, and achieve personal or organizational objectives.

Beneficial

Refers to something that provides an advantage or contributes to well-being.

Strategic Contingencies

Critical events or factors that significantly influence the success of strategies or decision-making processes within organizations.

Source Of Uncertainty

Any factor or condition that creates doubt or ambiguity in decision-making or planning.