If the Government Regulates the Price That a Natural Monopolist

question 495

Multiple Choice

If the government regulates the price that a natural monopolist can charge to be equal to the firm's marginal cost, the firm will

• A)earn zero profits.
• B)earn positive profits, causing other firms to enter the industry.
• C)earn negative profits, causing the firm to exit the industry.
• D)minimize costs in order to lower the price that it charges.

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Definitions:

Organic Products

Compounds containing carbon that are produced as a result of organic reactions.

Amino Acid Analyzer

A device that is used for the identification and quantification of amino acids in a sample, typically using chromatographic techniques.

Amino Acids

Organic compounds containing both amino and carboxyl groups, serving as the building blocks of proteins.

Peptide

A short chain of amino acid monomers linked by peptide (amide) bonds, usually considered to include chains of up to 50 amino acids.