Which of the Following Statements Is False

question 23

Multiple Choice

Which of the following statements is false?

• A)Average-cost pricing usually refers to setting a price for a natural monopoly firm that is equal to its ATC, thus guaranteeing the firm a normal profit.
• B)An economist thinks that there are both benefits and costs to most (if not all) types of regulation.
• C)The public choice theory of regulation holds that regulators are seeking to do, and will do through regulation, what is in the best interest of the society at large.
• D)One of the unintended effects of profit regulation (in the form of guaranteeing the natural monopoly firm that it will always earn normal profit-nothing more and nothing less) is that the natural monopoly has no incentive to keep its costs down.