In the Long Run,the Imposition of Average-Cost Pricing in Natural

question 58

Multiple Choice

In the long run,the imposition of average-cost pricing in natural monopolies,such as Manitoba Hydro and New Brunswick Power,would generally lead to

• A)allocative efficiency.
• B)productive efficiency.
• C)distorted investment decisions.
• D)a reduction in the output by these firms.
• E)both allocative efficiency and productive efficiency.

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Definitions:

Savings

Money set aside for future use rather than spent immediately, often in a bank or other financial institution.

Educational Standards

Established criteria to measure the effectiveness of curriculum, teaching, and student learning in schools.

Military Spending

Government expenditure on defense forces and activities, including salaries, equipment, and facilities.

Productivity Growth

The rate at which the efficiency of production increases, often measured by the output per unit of labor input over time.