Marginal Cost Regulatory Pricing Turns Out to Be the Same

question 152

Multiple Choice

Marginal cost regulatory pricing turns out to be the same as output regulation (for a natural monopoly firm) if the output level set by government is the

• A)amount at which marginal cost equals average total cost.
• B)resource-allocative efficient amount.
• C)amount at which average total cost is at its highest level.
• D)amount at which marginal revenue equals marginal cost.
• E)none of the above

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