The Maximum Price That Consumers Are Willing to Pay for the Hundredth

question 285

Multiple Choice

The maximum price that consumers are willing to pay for the hundredth unit of a good can be found as

• A) the height of the supply curve at a quantity of 100.
• B) the height of the demand curve at a quantity of 100.
• C) the difference between the height of the supply and demand curves at a quantity of 100.
• D) none of the above.

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Definitions:

Deregulation

Deregulation is the process of removing or reducing government restrictions and regulations in industries to encourage more competition and efficiency.

Regulatory Capture

A situation where regulatory agencies are dominated by the very industries they are charged with regulating, leading to favorable outcomes for the industry.

Regulatory Agency

An agency, commission, or board established by the federal government or a state government to control the prices charged and the services offered by a natural monopoly or public utility.

Principal-Agent Problem

A dilemma in economics where one party (the agent) is supposed to act in the best interest of another party (the principal) but may have different goals.