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:

Stress

A physical, mental, or emotional factor that causes bodily or mental tension and may arise from various situations or thoughts that make someone feel frustrated, angry, or nervous.

Social Readjustment

The process of adapting to significant changes in one's life, which can be a source of stress and require considerable psychological adjustment.

Rating Scale

A method for measuring quantitative or qualitative information by assigning values along a continuous or discrete scale.

LCU Score

Life Change Units Score, a measure assessing the stress level of individuals by quantifying the extent of life changes they have experienced.