Which of the Following Is True When Regulators Require a Natural

question 47

Multiple Choice

Which of the following is true when regulators require a natural monopolist to set price equal to marginal cost?

• A)This policy results in a less-than-socially-optimal allocation of resources.
• B)The marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit.
• C)The monopolist experiences recurring losses unless a subsidy is provided.
• D)The monopolist earns a normal profit.
• E)The monopolist earns an economic profit.

---

Definitions:

Social Pressures

The influence that is exerted on individuals or groups by others within the same society or community, often encouraging conformity.

Blame Themselves

The act of holding oneself responsible for a particular outcome or situation.

Accurate Representation

A depiction or description that closely matches the true characteristics or facts of a subject.

Brains

The organ in the head of vertebrates that controls the body's functions and enables it to think, feel, and remember.