In the Long Run,the Imposition of Average-Cost Pricing in Natural

question 58

Multiple Choice

In the long run,the imposition of average-cost pricing in natural monopolies,such as Manitoba Hydro and New Brunswick Power,would generally lead to

• A)allocative efficiency.
• B)productive efficiency.
• C)distorted investment decisions.
• D)a reduction in the output by these firms.
• E)both allocative efficiency and productive efficiency.

---

Definitions:

Other Comprehensive Income

Specified items that are reported separately from net income, including foreign currency items, pension liability adjustments, and unrealized gains and losses on investments.

Adjustment

A process of making entries to account records to correct or update the financial information.

Certificates of Deposit

These are time-bound savings certificates offered by banks with a fixed maturity date and specified fixed interest rate.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and equity at a specific point in time.