答案和详解如下： 1.Regulations are frequently implemented that attempt to deal with markets with high barriers to entry. Which statement is least likely to be a reason why they often fail? A) Regulators prevent monopolists from making a profit. B) Regulators fail to fully understand the firms cost curves and demand schedule. C) An existing firm in the industry is able to influence the regulatory board. D) Due to regulation, a firm has little incentive to control costs as the costs can be shifted to consumers via a price increase. The correct answer was A) Regulators do not seek to prevent monopolists from making a profit. Instead using average cost pricing, regulators will try to prevent monopolists from making a zero economic profit and ensure the monopolist a normal profit. The other choices are reasons why regulations can fail. 2.Which of the following is least likely to be considered a reason why regulation of monopolies is not effective? A) Regulators do not know the firm’s cost structure. B) Regulation shifts industry demand and increases prices. C) Regulation reduces the incentive for firms to reduce costs. D) As regulation decreases profits, firms may decrease quality. The correct answer was B) Regulation is not associated with a shift in industry demand. 3.Which of the following describes the regulatory practice of setting prices at a level where the monopoly firm’s average total cost curve intersects the demand curve? A) Average cost pricing. B) Marginal cost pricing. C) Cost-of-service pricing. D) Rate-of-return pricing. The correct answer was A) Under average cost pricing, regulators attempt to force monopolies to reduce prices to where a firm’s average total cost curve intersects the market demand curve. This will increase output and decrease price, increase allocative efficiency, and ensure zero economic profit. 4.Consider the following statements: Statement 1: “A natural monopoly exists when economies of scale are so pronounced that all of an industry’s demand should be supplied by one firm.” Statement 2: “Monopoly is characterized by a single seller of a distinct product for which no good substitutes exist.” Statement 3: “Average cost pricing is a form of regulation that is intended to force monopolists to reduce output to the point where the monopolist’s average total cost curve intersects its marginal cost curve.” Which of the following best describes the accuracy of these statements?
| Statement 1
| Statement 2 | Statement 3 |
A) Incorrect Correct Incorrect B) Correct Incorrect
Correct C) Incorrect Incorrect
Correct D) Correct Correct Incorrect The correct answer was D) Statement 3 is incorrect because average cost pricing attempts to force the monopolist to produce where the average total cost curve intersects the demand curve and to charge a price equal to ATC. 5.Natural monopolies exist because they can produce at lower costs with greater output, which means there are economies of scale. Which of the following industries is typically a natural monopoly? A) Technology. B) Utilities. C) Oil. D) Automotive. The correct answer was B) With a natural monopoly average costs of production will be lowest when a single large firm produces the entire output demanded such as a utility. | 
发表于 2008-4-17 12:13
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