QUESTION 8 In theory, placing a price control on a natural monopoly should have
ID: 2439173 • Letter: Q
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QUESTION 8 In theory, placing a price control on a natural monopoly should have the same outcome as public ownership create zero economic profits for the comp reduce deadweight loss as much as possible All of these statements are true any QUESTION 9 The government should set the p rice for natural m onopolies at their: average total cost. marginal cost. average variable cost. fixed cost. QUESTION 10 The long run outcome of the monopolistically competitive firm: occurs where price equals marginal cost. maximizes total surplus. O creates welfare loss. does not maximize profits. QUESTION 11 The presence of a monopoly helps: producers. consumers. society overall All of these are helped by a monopoly QUESTION 12 The regulation of natural monopolies is common in which of the following industries? Electricity Oil Tobacco AlcoholExplanation / Answer
8.
In theory, placing a price control on a natural monopoly should have the same output as public ownership. It creates zero economic profits and reducing deadweight loss as much as possible. A natural monopoly refers to a market in which a single firm can produce at a lower cost than many competitors such that the entire quantity of output demanded can be produced.
the correct option is (d)
9.
The government should set the price for natural monopolies at their average total costs which is due to economies of scale.
the correct option is (a)
10.
The long-run outcome of the monopolistically competitive firm is when price equals marginal cost as a monopolistically competitive firm behaves as perfect competitive firm in the long run.
the correct option is (a)
11.
The presence of monopoly helps producers gain economic profits or abnormal profits which is not possible in the market structures.
the correct option is (a)
12.
The regulation of natural monopoly is common in electricity and oil industries and other natural resources. The natural monopoly is a single firm which can produce the good at a lower price than any other firm due to economies of scale.
the correct option is (a) and (b)
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