Which of the Following Is Not a Problem Associated with Regulation

question 43

Multiple Choice

Which of the following is not a problem associated with regulation of a natural monopoly?

• A)Regulation using average-cost pricing reduces a firm's incentive to keep costs down.
• B)Regulation stifles the incentive that firms have to innovate.
• C)Regulators do not have full information about a firm's demand and cost functions.
• D)Regulation increases collusion and cartelization among firms.

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Definitions:

Cultural Bias

A predisposition to interpret and judge other people's cultures by the standards and values of one's own culture.

Validity

refers to the extent to which a concept, conclusion, or measurement is well-founded and corresponds accurately to the real world.

Reliability

The degree to which an assessment tool produces consistent results when the same entity is measured under the same conditions on multiple occasions.

Stereotype Threat

Stereotype threat is the fear of confirming negative stereotypes about one's group, which can impair performance in a variety of domains.