The Diagram Below Shows Cost and Revenue Curves for a Natural

question 54

Multiple Choice

The diagram below shows cost and revenue curves for a natural monopoly producing electricity.Price is dollars per kilowatt hour and quantity is kilowatt hours per day. FIGURE 12-7
-Refer to Figure 12-7.Suppose this firm is being regulated using a pricing policy of average-cost pricing.In this case,economic profits are equal to

• A)$10 000.
• B)$6000.
• C)$126 000.
• D)$28 000.
• E)$0.

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Definitions:

Federal Statute

A federal statute is a law enacted by the legislative branch of the federal government of the United States.

Contributory Negligence

A legal doctrine that reduces the amount of damages a plaintiff can recover in a negligence-based claim, based upon the degree to which the plaintiff's own negligence contributed to the cause of the injury.

Last Clear Opportunity

A legal principle in some tort law jurisdictions that allows the defendant to be exempted from liability if it can be shown they had no final clear chance to avoid the accident.

Comparative Negligence

A principle of tort law that reduces the amount of damages a plaintiff can recover in a negligence-based lawsuit, proportionate to the plaintiff's degree of fault.