A Marginal Cost Pricing Rule for a Natural Monopoly Sets

question 4

Multiple Choice

A marginal cost pricing rule for a natural monopoly sets _______.

• A) price equal to marginal cost and greater than average total cost
• B) marginal revenue equal to average total cost
• C) price equal to marginal cost
• D) marginal revenue equal to marginal cost

---

Definitions:

Hamburgers

A popular food item consisting of a cooked patty of ground meat, usually beef, placed inside a sliced bread roll or bun.

Deadweight Loss

A loss in economic efficiency that occurs when the equilibrium outcome is not achievable or is not achieved.

Elastic

A characteristic of a good or service that indicates its sensitivity to changes in price, with relatively large changes in quantity demanded or supplied in response to price changes.

Inelastic

Inelastic describes a situation where the demand or supply for a good or service is not significantly changed by variations in price.