An Average Cost Pricing Rule for a Natural Monopoly Sets

question 398

Multiple Choice

An average cost pricing rule for a natural monopoly sets the price ________ the marginal cost, thereby ________ a deadweight loss.

• A) below; avoiding
• B) below; creating
• C) above; avoiding
• D) above; creating

---

Definitions:

Dissociate

In chemistry, it refers to the process by which molecules, ions, or complexes split into smaller particles or ions, often reversible and influenced by environmental conditions.

Aqueous Solution

A mixture where water acts as the dissolving medium.

LiI

Lithium iodide, a chemical compound made of lithium and iodine, used notably in batteries and pharmaceuticals.

Electrolyte

A substance that produces an electrically conducting solution when dissolved in water, important in many biological processes.