The Problem with Adopting a Fair-Return Pricing Policy for a Natural

question 397

Multiple Choice

The problem with adopting a fair-return pricing policy for a natural monopoly is that

• A)economic profits will be positive.
• B)economic profits will be negative.
• C)it is not productively efficient.
• D)it is not allocatively efficient.

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Definitions:

Ship Captains

Professionals responsible for navigating ships and supervising their crew to ensure the safe transportation of cargo or passengers.

Basic Research

Fundamental scientific investigation aimed at gaining more comprehensive knowledge or understanding of the subject under study, without immediate practical application in mind.

Public Sector

The sector of an economy that is controlled by the government and includes government services and enterprises.

Free-Rider Problem

A situation in public goods where individuals benefit without contributing due to non-excludability.