practice5 - 1) Consider an unregulated monopoly in Figure...

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1) Consider an unregulated monopoly in Figure 16.2. The firm's profit at the profit maximizing output level is: A) $600,000. B) $400,000. C) $200,000. D) $0. 2) Consider an unregulated monopoly in Figure 16.2. Suppose that a second firm enters the market. As a result, if the demand curve facing each firm lies entirely below the long- run average cost curve, A) both the first and the second firm make positive economic profits. B) neither firm makes a positive economic profit. C) only one of the two firm can makes a positive economic profit. D) There is no sufficient information. 3) Government agencies often regulate the price natural monopolies charge because, if left unregulated, natural monopolies will: A) charge a price greater than average cost. B) face too many competitors. C) charge a price less than average cost. D) charge a price equal to average cost. 4) A regulatory policy under which the government picks the point on the demand curve at which price equals average cost is known as:
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This note was uploaded on 05/27/2008 for the course ECON 160B taught by Professor Michaelvardanyan during the Fall '08 term at Binghamton.

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practice5 - 1) Consider an unregulated monopoly in Figure...

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