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1. If monopoly power is a threat to an industry that otherwise could be effcetiv

ID: 1187843 • Letter: 1

Question

1. If monopoly power is a threat to an industry that otherwise could be effcetively served by numerous competitors, the most suitable type of policy to apply would be:

A.Conversion of the industry into a government agency

B. Natural monopoly regulation

C. Price Discrimination

D.Antitrust Policy


2."Economic profit" normally is less than "accounting profit" because economists:

A. Do not include cash revenue in the calculation of profit

B.Do not include depreciation as an economic cost

C Include "normal profit" as part of opportunity costs

D.Include negative marginal revenue as costs

Explanation / Answer

11.C. Price Discrimination

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