-Natural Gas Is a Natural Monopoly

question 255

Multiple Choice

-Natural gas is a natural monopoly. The figure above shows the market for natural gas in the city of Lucknow. When a marginal cost pricing rule regulation is imposed, the price per household per month is

• A) $30 and 20,000 household are served.
• B) $10 and 40,000 household are served.
• C) $10 and 20,000 household are served.
• D) $20 and 30,000 households are served.

---

Definitions:

Bargain Purchase Option

A clause in a lease agreement allowing the lessee to purchase the leased asset at the end of the lease term at a price significantly below its expected fair market value.

Executory Costs

Expenses related to executing a contract, such as maintenance and insurance costs, that are typically incurred over the contract's term.

FASB

The Financial Accounting Standards Board, responsible for establishing and improving financial accounting and reporting standards in the United States.