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1. What are a regulated firm's incentives to act anticompetitively in competitive markets when its monopoly market is regulated using price caps? Does it have the same incentives as a firm subject to cost-based regulation? Explain. Can you think of how implementation of price-cap regulation might create incentives for anticompetitive behavior?
2. What can you infer about the nature of the telecommunications and natural gas transmission markets by the prevalence of price caps in the former and their dearth in the latter?
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Briefly discuss the concept of both positive and negative externalities and give specific examples of each. In your explanations of the two, cover the differences, discuss why property rights are an important variable, and discuss any other releva..
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If a fixed number of industrial pollution permits are marketable, then we should just sell the right to smoke to the highest bidders rather than ban smoking outright in many cities, towns, business outlets, bars and restaurants. It would reduce the e..
economists believe that when two countries specialize and trade , each will be able to buy goods in which the other specializes at a lower cost than it would take to produce these goods itself.
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