Which of the Following Is a Possible Effect of Government

question 134

Multiple Choice

Which of the following is a possible effect of government regulation on a natural monopolist?

• A)The firm earns zero economic profit.
• B)The firm earns positive economic profit.
• C)The firm faces a horizontal demand curve.
• D)The firm incurs an economic loss.
• E)The firm faces an upward-sloping demand curve.

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Definitions:

Operating Activities

Activities that relate to the primary operations of a company, including production, sales, and delivery of its products or services.

Income Statement

A document detailing a corporation's financial results for a given fiscal period, including income, costs, and net profit.

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating capital structure.

Financing Activities

Transactions between a business and its sources of funding, including equity and debt, reflected in the cash flow statement.