Suppose Kansas had a severe ice storm that caused electrical blackouts The Ficti

Question

Suppose Kansas had a severe ice storm that caused electrical blackouts The Fictitious Portable Generator firm of Lawrence had several portable generators that could be used by homeowners to provide electricity Which of the following would be the fair-rules way to provide them? 0 A. Fictitious rents generators at the equilibrium market price B. The government confiscates the generators owned by Fictitious and distributes them C. The state sets up a lottery to determine who rents the available generators at the normal rate. 0 D. Fictitious ts forced by the state to rent the generators at half the normal rate E. Fictitious follows government commands about who gets to use the generators

Explanation / Answer

Each and everyone should have a fair chance of having a generator. If we tag a price on generator then it will not be fair because then everyone will not have an equal chance. A lottery seems to be a fair option because at a normal rate everyone will have an equal chance of receiving it. Option C is correct

Option E is it correct because when the already existing firms are earning profits it will give an encouragement to the new forms to enter the market and so the profits of the existing forms will start falling

Option d should be selected because both of these measures are the measures of competition in the market. If there value is high it means the market power is concentrated in few firms hence the competition will reduce.

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