If a Natural Monopoly Has an Average Cost Pricing Rule

question 564

Multiple Choice

If a natural monopoly has an average cost pricing rule imposed, the rule will

• A) maximize total surplus in the regulated industry.
• B) generate an economic loss for the regulated firm.
• C) reduce the consumer surplus and generate a deadweight loss when compared to a marginal cost pricing rule.
• D) set price below marginal cost.

---

Definitions:

Effective Appraisal

The process of evaluating an employee's job performance in a constructive manner, aiming to encourage professional growth and improve future performance.

Performance Evaluation

The systematic assessment of an employee's job performance, strengths, and areas for improvement, typically conducted on a regular basis by their supervisor.

Rating Errors

Inaccuracies or biases that can occur when assessing the performance or abilities of individuals, affecting the fairness and accuracy of evaluations.

Primacy Effect

The tendency to remember information at the beginning of a body of information better than the information that follows.