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91. The electric utility industry became a target for deregulation
92. Proponents of electric utility industry deregulation argue that
A. Profit regulation resulted in increased costs and higher prices.
93. Proponents of electric utility industry deregulation argued that deregulation was justified because
94.
To maximize profits, an unregulated natural monopolist would choose which combination of price and output in
Figure 27.1?
95.
The socially optimal price and output combination in Figure 27.1 is
96.
If regulation of the natural monopolist called for marginal cost pricing in Figure 27.1, the regulatory
agency should set the price at
97.
The use of marginal cost pricing in Figure 27.1 will result in
Demand is equal to MC at P4, which is below ATC and therefore generates economic losses.
98.
Adherence to marginal cost pricing in Figure 27.1 will necessitate
99.
If regulation of the firm called for it to earn only a normal profit or rate of return in Figure 27.1, the regulatory
agency should set the price at
100.
Refer to Figure 27.1. Production efficiency
101.
In Figure 27.2, an unregulated natural monopoly will produce
102.
The unregulated monopoly in Figure 27.2 will experience
103.
Output regulation for the natural monopoly in Figure 27.2 would result in an output of
104.
In Figure 27.2, regulation designed to achieve allocative efficient pricing for the natural monopoly will result in
a price of
