If a Regulatory Commission Wants to Establish a Socially Optimal

question 275

Multiple Choice

If a regulatory commission wants to establish a socially optimal price for a natural monopoly, it should select a price

• A)at which the marginal cost curve intersects the demand curve.
• B)at which marginal revenue is zero.
• C)at which the average total cost curve intersects the demand curve.
• D)that corresponds with the equality of marginal cost and marginal revenue.

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Definitions:

Social Forces

The structures, institutions, and social dynamics that influence individuals and groups in society, shaping behaviors, attitudes, and opportunities.

Self-Actualization

The achievement of realizing one’s own talents and capabilities, seen as a natural desire or necessity inherent in all people.

Physiological Needs

Fundamental human requirements such as air, water, food, shelter, and sleep, which are necessary for survival according to Maslow's hierarchy of needs.

Preoccupied

Being engrossed or absorbed in thoughts, concerns, or activities, often to the extent of being unaware of other things.