There Is a Deadweight Loss If a Natural Monopoly Is

question 72

Multiple Choice

There is a deadweight loss if a natural monopoly is regulated to use

• A) marginal cost pricing and if it is allowed to be unregulated and maximise its profit.
• B) marginal cost pricing and if it is regulated to use average cost pricing.
• C) average cost pricing and if it is allowed to be unregulated and maximise its profit.
• D) None of the above answers is correct.

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Definitions:

Income Statement

A report that outlines a business's financial results, including income, expenses, and net profit or loss, for a designated accounting period.

Peripheral Activity

Refers to operations or actions that are not central to the primary business functions but may still generate revenue or incur costs.

Income Statement

A report that outlines a corporation's financial results for a particular accounting term, including income, costs, and profit.

Operating Income

Earnings before interest and taxes (EBIT), derived from a company's primary business activities.