Which of the Following Is True of a Natural Monopoly

question 168

Multiple Choice

Which of the following is true of a natural monopoly?

• A)If regulated, the firm will have a higher level of output than an unregulated firm, whether the regulation is based on average cost, marginal cost, or normal profit.
• B)If regulated, the firm will have a lower level of output than an unregulated firm, whether the regulation is based on average cost, marginal cost, or normal profit.
• C)If regulated, the firm that is only allowed a normal profit will be allowed to charge a price in excess of its average cost.
• D)If regulated, the firm that is only allowed a normal profit will be allowed to produce more than a firm that must set a price equal to its marginal cost.
• E)If regulated, the firm that is only allowed a normal profit will be allowed to produce more than a firm that must set a price equal to its average cost.

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Definitions:

Mean

The mean of a series of numbers, determined by dividing their total sum by the quantity of numbers in the series.

Confidence Interval

A range of values derived from sample statistics that is likely to contain the true population parameter with a given level of confidence.

Standard Error

A measure of the variability or dispersion of a sample statistic from the population parameter it estimates.

Mean

The average of a set of numerical values, calculated by adding them together and dividing by the number of terms in the set.