When Used with a Natural Monopoly,an Average Cost Pricing Rule

question 174

Multiple Choice

When used with a natural monopoly,an average cost pricing rule results in

• A) the efficient level of output.
• B) economic losses for the firm.
• C) the need for government to subsidize the natural monopoly.
• D) zero economic profit for the firm.
• E) the firm making an economic profit.

Recognize the significance of creativity and methods to assess it.

Understand the concept of producer surplus and how it is affected by changes in market conditions.

Analyze the effects of price changes on consumer surplus and total surplus in a market.

Recognize the relationship between supply curve movements, prices, and producer surplus.

---

Definitions:

Sensory-Motor

Pertaining to the neural processes that integrate sensory input with motor output.

Preoperational

The stage of cognitive development in Piaget's theory, characterized by symbolic thinking, egocentrism, and a lack of logical reasoning.

Accommodation

The process by which the eye's lens changes shape to focus on near or distant objects, or in psychology, altering one's beliefs to make them compatible with reality.

Assimilation

A cognitive process where individuals integrate new information into existing knowledge structures or schemas.