If a Regulatory Commission Wishes to Allow a Firm to Earn

question 4

Multiple Choice

If a regulatory commission wishes to allow a firm to earn a normal rate of return,it should set price equal to:

• A) marginal revenue.
• B) marginal cost.
• C) average total cost.
• D) average variable cost.

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Definitions:

Performance Characteristic

Features or aspects of a product or service that determine its ability to meet its intended function or user requirements.

Product

An item or service that is created, manufactured, or refined for sale.

Want

A desire for something that isn't essential but is desired for satisfaction or fulfillment.

Need

A requirement essential to someone's well-being or the success of a task or objective.