Because Natural Monopolies Have a Declining Average Cost Curve, Regulating

question 281

Multiple Choice

Because natural monopolies have a declining average cost curve, regulating natural monopolies by setting price equal to marginal cost would

• A)cause the monopolist to operate at a loss.
• B)result in a less than optimal total surplus.
• C)maximize producer surplus.
• D)result in higher profits for the monopoly.

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Definitions:

Internalized Ideals

Beliefs, values, or norms that an individual adopts and integrates into their sense of self.

Superego

In psychoanalytic theory, the part of the personality that represents ethical or moral standards and strives for perfection.

Oedipus Complex

In Freudian theory, a child's feelings of desire for the opposite-sex parent and jealousy and envy towards the same-sex parent.

Ego

In psychoanalytic theory, the part of the personality that balances the demands of the id, superego, and reality.