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.

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Definitions:

Outsourcing

Outsourcing is the practice of hiring third-party service providers to handle certain business functions or operations outside the company to save costs and focus on core competencies.

Outside Vendors

External organizations or individuals that supply goods or services to a company, often in areas not core to the company’s main business.

In-house

Activities or operations performed within an organization by its own members or employees, rather than by external parties.

Environmentally Friendly

Pertains to goods, services, and practices that cause minimal harm to the environment.