Which of the Following Is a Possible Negative Result of a Policy

question 99

Multiple Choice

Which of the following is a possible negative result of a policy of average-cost pricing as a method of regulating a natural monopoly?

• A)economic losses will accumulate over time to unsustainable levels
• B)taxpayers will have to subsidize the economic losses of the regulated monopoly
• C)the regulated monopoly earns unreasonable profits
• D)socially desirable capital investment may not occur
• E)the induced technological change leads to more industries becoming natural monopolies

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.