When Regulated Using Rate of Return Regulation,who Benefits from the Practice

question 131

Multiple Choice

When regulated using rate of return regulation,who benefits from the practice of some natural monopolies to count sumptuous offices,free baseball tickets,golf excursions,and limousines as costs of production?

• A) stockholders
• B) managers of the monopoly
• C) customers of the monopoly
• D) regulators of the industry
• E) None of the above answers is correct.

Explain the concept of deadweight loss and its relation to taxation.

Describe how the elasticity of demand and supply affects the burden of a tax.

Understand the Laffer curve and its implications for setting tax rates.

Evaluate the impact of specific taxes on behavior and market outcomes.