If Average-Cost Pricing Is Imposed on a Falling-Cost Natural Monopoly,the

question 30

Multiple Choice

If average-cost pricing is imposed on a falling-cost natural monopoly,the result will be

• A)exit from the industry in the short run.
• B)zero economic profit.
• C)economic profits.
• D)economic losses.
• E)losses and exit from the industry in the long run.

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Definitions:

Timing Differences

Discrepancies between the timing of cash flows and the recognition of revenues and expenses in accounting records.

Recording Error

Mistakes made during the accounting process of recording financial transactions.

Journal

The initial record in which the effects of a transaction are recorded.

Company's Records

Official documents and files that include a business's operational, financial, and transactional data.