A Natural Monopoly That Is Not Regulated Will Choose to Produce

question 208

Multiple Choice

A natural monopoly that is not regulated will choose to produce at the

• A) minimum point of the long-run average cost curve.
• B) point at which marginal cost is above average total cost.
• C) point at which the demand curve intersects the long-run average cost curve.
• D) point at which marginal revenue equals marginal cost.

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Definitions:

Rent Payment

Monetary compensation paid by a lessee to a lessor for the use of a particular property, piece of equipment, or facility.

Land Supplied

Land supplied indicates the quantity of land offered for use or development, affected by factors like pricing, zoning regulations, and market demand.

Rationing Function

The ability of market prices to allocate scarce resources efficiently among competing uses.