If an Average Cost Pricing Rule Is Imposed on the Natural

question 343

Multiple Choice

If an average cost pricing rule is imposed on the natural monopoly in the figure above, then the firm will

• A) incur an economic loss.
• B) make zero economic profit, that is, its owners make a normal profit.
• C) make an economic profit of $4 million.
• D) make an economic profit of $9 million.

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Definitions:

Caste

A form of social stratification characterized by hereditary status, endogamy, and social barriers sanctioned by custom or law.

Meritocracy

A system in which advancement and rewards are allocated based on individual abilities and merits rather than on the basis of social status, wealth, or other external factors.

American Dream

The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone.

Sociologists

Scholars or researchers who study social behavior, institutions, and structures from various perspectives within the field of sociology.