Marginal Cost Regulatory Pricing Turns Out to Be the Same

question 148

Multiple Choice

Marginal cost regulatory pricing turns out to be the same as output regulation (for a natural monopoly firm) if the output level set by government is the

• A)amount at which marginal cost equals average total cost.
• B)resource-allocative efficient amount.
• C)amount at which average total cost is at its highest level.
• D)amount at which marginal revenue equals marginal cost.

---

Definitions:

Wholesaler

An entity in the distribution channel that buys goods in large quantities from manufacturers or importers and sells them to retailers or other businesses.

Material Terms

Essential conditions and stipulations within a contract that are significant to the agreement and affect its execution or enforcement.

Subject Matter

The specific object or topic under consideration, discussion, or legal examination.

Quantity

A specific or measurable amount of something.