QUESTION 8 \"Regulatory lag\" refers to the period between the time when O a a f

Question

QUESTION 8 "Regulatory lag" refers to the period between the time when O a a firm is initially regulated by an agency and the time the firm "captures" that agency OD the natural monopolist changes its prices and the time when the regulatory agency rules on that change. C the regulatory agency decides to deregulate a firm and the timeit actually accomplishes the tnsk d. the regulatory agency decides to regulate a firm and the time it actually accomplishes the task. e the natural monopolist's costs change and the time the regulatory agency adjusts the monopolist's prices

Explanation / Answer

A natural monopolist has to change its cost of production in order to continue its its operations. There is a regulatory authority that attempts to bring out changes in the prices structure of the monopolist because otherwise a natural monopolist charges a very high price. Therefore it is the time period between the change in the cost of production and the adjustment made in the prices by the regulatory authority.

Option E is correct

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