If a Natural Monopoly Is Regulated Using the Marginal Cost

question 380

Essay

If a natural monopoly is regulated using the marginal cost pricing rule,how will that affect prices,outputs,profits,and the distribution of surpluses? What are the pros and cons to this method of regulation?

Understand the strategies and technologies for improving service productivity.

Identify and describe the role of information technology in improving operational processes.

Comprehend the principles of mass customization and its essential ingredients.

Recognize different types of diagrams and their uses in operational processes.

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Definitions:

Equilibrium GDP

The level of Gross Domestic Product where the total output of an economy equals the total demand.

Open Market

An economic system in which buying and selling of goods and services are conducted freely with minimal government intervention.

Government Bonds

Securities issued by a government to finance its expenditures, repaid over a period.

Open Market

A marketplace with few restrictions on entry or trade, allowing goods and services to be bought and sold freely.