Which of the Following Is Not a Problem Faced by Regulators

question 37

Multiple Choice

Which of the following is not a problem faced by regulators while regulating a natural monopoly such as cable television or electric utility company?

• A)Regulators lack sufficient information regarding the monopolists cost structure.
• B)Regulation reduces the incentive for the monopolist to reduce costs.
• C)Regulation may cause the monopolist to suppress innovation and new product development.
• D)Regulation of a monopoly usually leads to a decline in total surplus.

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Definitions:

Continental Margin

The zone of the ocean floor that separates the thin oceanic crust from thick continental crust, including the continental shelf, slope, and rise.

Plate Boundary

The edges where two tectonic plates meet, which can be divergent, convergent, or transform, leading to various geological features and events.

Normal Faults

Fractures in the Earth's crust where the rock above the fault plane has moved down relative to the rock below.

Crust Thicken

Crust thickening refers to the increase in the Earth's crust's depth due to geologic processes, such as the accumulation and compression of sediments or the intrusion of igneous rock.