Under a Marginal Cost Pricing Rule,a Regulated Natural Monopoly

question 64

Multiple Choice

Under a marginal cost pricing rule,a regulated natural monopoly

• A)makes an economic profit and a deadweight loss arises.
• B)makes an economic profit with no deadweight loss.
• C)incurs an economic loss with no deadweight loss.
• D)incurs an economic loss and a deadweight loss arises.
• E)breaks even.

---

Definitions:

Issue Price

The price at which new shares are offered to the public or bonds are sold, determined at the time of issue.

Stock Dividends Distributable

It represents the shares that are due to shareholders as a dividend but have not yet been distributed.

Retained Earnings

The accumulated portion of net income that a company decides to keep, rather than distributing among shareholders as dividends, to finance investment or pay off debt.

Common Shares

Equity securities representing ownership interests in a corporation, providing voting rights and entitling shareholders to a share of the company's profits via dividends.