Suppose That One Forestry Company Can Operate at a Lower

question 48

Multiple Choice

Suppose that one forestry company can operate at a lower average cost than several smaller firms. The forestry company is a natural monopoly in this local region. If the government was to regulate log prices to equal marginal cost, then this would:

• A) result in a less than optimal total surplus for the log market
• B) maximise the forestry company's producer surplus
• C) cause the forestry company to operate at a loss
• D) do all of the above

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Definitions:

Restricting Writing

Generally refers to limiting or controlling the act of writing, either through physical means, censorship, or other forms of suppression.

Higher Probability Behavior

A concept in operant conditioning referring to a behavior that occurs more frequently, thus can be used as a reinforcement for a behavior of lower frequency.

FR-2 Schedule

A fixed-ratio schedule where reinforcement is provided after every second correct response.

FR-4 Schedule

A fixed-ratio schedule where a response is reinforced only after four instances of that response.