When Regulators Use a Marginal-Cost Pricing Strategy to Regulate a Natural

question 81

Multiple Choice

When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly

• A)will experience positive profit.
• B)will experience a price above average total cost.
• C)does not need a government subsidy to remain in business.
• D)will experience a loss.

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Definitions:

Nile Perch

A large freshwater fish native to African rivers, lakes, and reservoirs, known for its significant role in commercial fishing.

Lake Victoria

Africa's largest lake by area, and it is among the largest freshwater lakes in the world, known for its rich biodiversity.

Biodiversity Decline

A reduction in the variety and variability of life forms within a given ecosystem, region, or across the planet, often resulting from human activities.

Ballast Water

Water carried in ships’ ballast tanks to improve stability and balance, which can introduce invasive species to new environments when discharged.