Which of the Following Explains Why the Marginal Cost Pricing

question 60

Multiple Choice

Which of the following explains why the marginal cost pricing rule results in an economic loss for a natural monopoly?

• A) The demand curve is downward sloping, therefore price falls as quantity increases.
• B) The MC is constant and equal to price.
• C) The ATC curve is downward sloping throughout the relevant range, therefore the MC is lower than the ATC.
• D) The firm's MR is always less than its price.
• E) Because output is determined by setting MC equal to the price, consumer surplus is maximised.

---

Definitions:

Empowerment

The process of giving individuals or groups the authority, resources, and confidence to take control of their own actions and decisions, typically aiming to increase their effectiveness and autonomy.

Governing Council

An administrative body responsible for making decisions and overseeing the policies and direction of an organization, institution, or government entity.

More Empowerment

An approach or strategy that aims to give individuals or groups greater authority and control over decisions and actions affecting their work or lives.

Elected Leaders

Individuals who have been chosen through a voting process to hold leadership positions, typically in political, institutional, or organizational contexts.