If the Government Attempts to Force a Natural Monopoly to Charge

question 135

Multiple Choice

If the government attempts to force a natural monopoly to charge a price equal to marginal cost,

• A) the natural monopoly will shut down.
• B) the natural monopoly will still make high profits.
• C) the natural monopoly's marginal cost curve will shift up.
• D) total welfare is maximized.

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Definitions:

Automatic Evaluation

An immediate, unconscious assessment of something as good or bad, often based on ingrained beliefs or feelings.

Abstract Art

A style of art that does not attempt to represent an accurate depiction of visual reality but instead uses shapes, colors, forms, and gestural marks to achieve its effect.

Intuitive Feeling

A decision-making process that is based on instinctive emotional responses rather than analytical reasoning.

Classical Conditioning

A type of learning in which, through repeated pairings, a neutral stimulus comes to evoke a conditioned response.