There Is No Deadweight Loss If the Regulatory Rule for a Natural

question 490

Multiple Choice

There is no deadweight loss if the regulatory rule for a natural monopoly

• A) is an average cost pricing rule.
• B) sets price at a level that enables the regulated firm to earn a specified rate of return on its capital.
• C) is a marginal cost pricing rule.
• D) prevents the firm from engaging in any form of price discrimination.

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