A Serious Problem with Average Total Cost Pricing Is That

question 135

Multiple Choice

A serious problem with average total cost pricing is that

• A)the deadweight loss to society is greater than with unregulated monopoly pricing.
• B)the firm has no incentive to earn a profit.
• C)the deadweight loss to society is the same as with unregulated monopoly pricing.
• D)inefficiencies in the firm will not be tolerated.
• E)the firm has no incentive to reduce costs.

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Definitions:

Macrosystem

A term used in Bronfenbrenner's ecological systems theory to describe the cultural or societal context that influences an individual's development, encompassing societal norms, laws, and culture.

Microsystem

The immediate environment in which an individual interacts, such as family, school, and workplace.

Exosystem

A concept from ecological systems theory that refers to the wider societal contexts that indirectly influence an individual, such as parents' workplaces or community-based services.

Mesosystem

A concept in ecological systems theory referring to the interconnections between different microsystems or immediate environments in an individual's life, such as the interactions between a child’s home and school.