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May 28, 2024

Answer each problem fully and use graphs to help explain the answers.

General Question

Answer each problem fully and use graphs to help explain the answers. There is not always one correct answer. The quality of your answer depends on the strength of your explanation and on your ability to apply economic concepts to these problems.

1.True, False, or Uncertain. Government should regulate natural monopolies so that they produce at an allocatively efficient quantity. Explain your answer.

2.True, False, or Uncertain. Public policy should encourage monopolies because they result in a larger output than would occur with perfect competition and allow the monopolist to earn a positive economic profit.

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