Question

If an authoritarian agency follows a rule of normal cost pricing, then an ordinary monopolist will

a.

be forced to shut down.

b.

produce more than it would if it were unregulated.

c.

earn economic profit greater than zero.

d.

earn more profit that it would if it were unregulated.

Answer: (b).produce more than it would if it were unregulated.

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Q. If an authoritarian agency follows a rule of normal cost pricing, then an ordinary monopolist will

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