Which of the Following Statements Is Correct

question 175

Multiple Choice

Which of the following statements is correct?

• A)Public ownership is preferred to regulation in order to minimize the deadweight losses associated with natural monopolies.
• B)Antitrust laws are always the best way to limit monopoly power.
• C)It is possible that the best approach to monopolies is for the government to do nothing.
• D)Marginal-cost pricing requires a natural monopoly to earn zero economic profits.

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Definitions:

Foreign Producers

Foreign producers are companies or individuals who produce goods or services outside the domestic market.

Tariff

Government-imposed duties on imported or, less commonly, exported goods, often established to protect domestic industries and to generate revenue.

Quota

A limit set by a government on the quantity of a particular product that can be imported or exported within a given timeframe, used for trade regulation.

Policy Action

A deliberate action taken by a government or other organization to influence economic, social, or environmental outcomes.