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-A Regulated Firm May Have an Incentive to Spend an Inefficiently

question 37

Multiple Choice

  -A regulated firm may have an incentive to spend an inefficiently high amount on capital when: A) it becomes deregulated. B) fair rate of return regulation is used. C) regulators set price equal to marginal cost. D) it is part of a monopolistically competitive industry. E) it is allowed to charge a monopoly price.
-A regulated firm may have an incentive to spend an inefficiently high amount on capital when:


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