Using Average Cost Pricing,regulators of a Natural Monopoly

question 76

Multiple Choice

Using average cost pricing,regulators of a natural monopoly

• A)force the firm's economic profit to zero
• B)maximize the firm's economic profit
• C)achieve Pareto efficiency
• D)set price equal to cost where the LRATC curve crosses the demand curve
• E)set price equal to marginal cost where the MC curve crosses the demand curve

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