A dilemma of regulation is that
A)the regulated price that achieves allocative efficiency is also likely to result in persistent economic profits.
B)the regulated price that results in a "fair return" restricts output by more than would unregulated monopoly.
C)regulated pricing always conflicts with the "due process" provision of the Constitution.
D)the regulated price that achieves allocative efficiency is also likely to result in losses.

Question

Quizplus · Accepted Answer

The regulated price that achieves allocative efficiency often results in prices that are too low to cover the costs of production, leading to losses for the firm.

A Dilemma of Regulation Is That