In Regulating a Natural Monopoly, the Price Strategy That Ensures

question 239

Multiple Choice

In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price

• A)equal to average total cost where it intersects the demand curve.
• B)equal to marginal cost where it intersects the demand curve.
• C)equal to average variable cost where it intersects the demand curve.
• D)corresponding to the demand curve where marginal revenue equals zero.

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Definitions:

Marketing Function

The activities and roles involved in identifying and meeting the needs and wants of customers through the creation and exchange of products and values.

Entire

Whole, complete, or having all the parts or elements.

Food Broker

An intermediary between food producers or manufacturers and retailers, responsible for negotiating sales, representing products, and sometimes managing product promotion.

Mr. Coffee

A brand name of coffee makers developed by North American Systems International in the early 1970s; recognized for popularizing the automatic drip coffee maker.