Which of the Following Is Not a Possible Justification for Regulated

question 29

Multiple Choice

Which of the following is not a possible justification for regulated markets?

• A)Possible market failure
• B)Natural monopolies
• C)The possibility that free markets are contrary to social goals
• D)Private contracting opportunities

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Definitions:

Fixed Expenses

Costs that do not vary with the level of production or sales over a short period, such as rent and salaries.

Relevant Costs

Future costs that will differ under various alternatives, considered important for making financial decisions.

Special Order

An order for goods or services that is outside the company's normal scope of operations or requires customization to meet the customer's specific requirements.

Excess Capacity

A situation where a company can produce more goods or services than currently demanded by the market, indicating underutilization of resources.