Question :
41) If we compare regulating a natural monopoly using a : 1226218
41) If we compare regulating a natural monopoly using a marginal cost pricing rule to using an average cost pricing rule, we see that output is
A) greater with marginal cost pricing but average cost pricing allows for costs to be covered.
B) the same under both cases but the profit is greater with average cost pricing.
C) greater under average cost pricing but profits are greater with marginal cost pricing.
D) the same but profits are greater with marginal cost pricing.
E) greater with marginal cost pricing and the firm’s profit is larger with marginal cost pricing.
42) Gene’s Car Wash is a natural monopoly. To wash 100 cars a week, if Gene is unregulated, he would charge a price of $10. Gene’s average total cost for washing 100 cars is $8, his average variable cost is $6, and his marginal cost is $4. If Gene is regulated using a marginal cost pricing rule, the price he is allowed to charge to wash 100 cars is
A) $10.
B) $8.
C) $6.
D) $4.
E) $400.
43) Gene’s Car Wash is a natural monopoly. To wash 100 cars a week, if Gene is unregulated, he would charge a price of $10. Gene’s average total cost for washing 100 cars is $8, his average variable cost is $6, and his marginal cost is $4. If Gene is regulated using an average cost pricing rule, the price he is allowed to charge to wash 100 cars is
A) $10.
B) $8.
C) $6.
D) $4.
E) $400.
44) The above figure represents the market for cable television in Oakland, Florida. Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community. If TWC is left unregulated, how many households in Oakland are served?
A) 20,000
B) 30,000
C) 40,000
D) 50,000
E) 10,000
45) The above figure represents the market for cable television in Oakland, Florida. Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community. If TWC is left unregulated, what is the price of cable television in Oakland?
A) $40
B) $30
C) $20
D) $10
E) $50
46) The above figure represents the market for cable television in Oakland, Florida. Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community. If TWC operated under a marginal cost pricing rule, how many households in Oakland are served?
A) 20,000
B) 30,000
C) 40,000
D) 50,000
E) 10,000
47) The above figure represents the market for cable television in Oakland, Florida. Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community. If TWC operated under a marginal cost pricing rule, what is the price of cable television in Oakland?
A) $40
B) $30
C) $20
D) $10
E) $0
48) The above figure represents the market for cable television in Oakland, Florida. Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community. If TWC operated under an average cost pricing rule, how many households in Oakland are served?
A) 20,000
B) 30,000
C) 40,000
D) 50,000
E) None of the above answers is correct.
49) The above figure represents the market for cable television in Oakland, Florida. Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community. If TWC operated under an average cost pricing rule, what is the price of cable television in Oakland?
A) $40
B) $30
C) $20
D) $10
E) $50
50) The above figure represents the market for cable television in Oakland, Florida. Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community. Compared to a marginal cost pricing rule, under an average cost pricing rule, TWC ________ output by ________ households.
A) increases; 20,000
B) decreases; 10,000
C) increases; 30,000
D) decreases; 50,000
E) decreases; 40,000
