The figure shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between London and Paris. If the airline is regulated, public interest theory implies that _______ flights will be offered each month at a price of _______ per flight.

200; £300
425; £125
250; £250
200; £100

The figure shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between London and Paris. If the airline is regulated, public interest theory implies that total surplus will be _______________.

£88,187.50
£8,500.00
£61,500.00
£176,375.00

The figure shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between London and Paris. If the airline is regulated, capture theory implies that _______ flights will be offered each month at a cost of _______ per flight.

250; £250
200; £100
200; £300
425; £125

Natural gas is a natural monopoly. The figure shows the market for natural gas in the city of Lucknow. When a marginal cost pricing rule regulation is imposed, the price per household per month is _______________.

£24 and 25,000 customers are served
£20 and 25,000 customers are served
£24 and the loss per household is zero
£20 and the loss per household is £2

Natural gas is a natural monopoly. The figure shows the market for natural gas in the city of Lucknow. When an average cost price rule regulation is imposed, the price per household per month is ________.

£20 and the loss per household is £2
£24 and deadweight loss is £10
£24 and deadweight loss is £10,000
£20 and 30,000 customers are served

If the producer of a natural monopoly can capture the regulator, then the monopoly will produce at the point where _____________________.

demand equals marginal cost and total surplus is maximized
marginal cost equals marginal revenue and profit is maximized
demand equals average total cost and producer surplus is maximized
marginal cost equals marginal revenue and consumer surplus is maximized

If an industry faces a rate of return regulation, it will produce output at the point where _______________.

the average total cost and marginal cost curves intersect
the marginal cost and demand curves intersect
the marginal revenue and marginal cost curves intersect
the average total cost and demand curves intersect

Under rate of return regulation, a monopoly ____________________.

has an incentive to deflate costs and capture more of the market
makes an economic profit
sets price equal to marginal cost
has an incentive to inflate costs

Cartels are designed to _______________.

increase total surplus
reduce deadweight loss
reduce consumer surplus and producer surplus
reduce consumer surplus and increase producer surplus

Total surplus is equal to ___________.

consumer surplus plus producer surplus minus deadweight loss
the gains from trade accruing to producers
the gains from trade accruing to consumers
consumer surplus plus producer surplus