Choose the Statement That Best Describes the Dilemma Facing the Regulator

question 79

Multiple Choice

Choose the statement that best describes the dilemma facing the regulator of a natural monopoly.

• A)Marginal- cost pricing will result in allocative inefficiency; average- cost pricing leads to profits or losses.
• B)Marginal- cost pricing will result in productive and allocative inefficiency; average- cost pricing will not.
• C)Marginal- cost pricing leads to profit or losses; average- cost pricing results in allocative inefficiency.
• D)Both kinds of regulation have the same implications for allocative efficiency.
• E)There is no dilemma.

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Definitions:

Intense Hunger

A strong, overwhelming desire or need to eat.

Reduced Rates of Metabolism

A slower-than-normal rate at which the body converts food and oxygen into energy.

Bulimia Nervosa

A serious eating disorder marked by binging, followed by methods to avoid weight gain.

Binge Eating Disorder

A psychological disorder characterized by recurrent episodes of eating large quantities of food, usually quickly and to the point of discomfort, accompanied by a feeling of loss of control.