For a Natural Monopoly, If Price Is Equal to Marginal

question 549

Multiple Choice

For a natural monopoly, if price is equal to marginal cost, then

• A) the deadweight loss is as large as possible.
• B) the firm makes zero economic profit.
• C) there is no deadweight loss.
• D) there is no deadweight loss and the firm makes a positive economic profit.

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Definitions:

Ecological Validity

The extent to which the findings of a study can be applied to and represent real-world settings and behaviors outside the context of the study itself.

Real World

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The Cognitive Revolution refers to a paradigm shift in psychology during the late 1950s and early 1960s that emphasized the study of internal mental processes, such as thinking, decision making, language, and problem solving.

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