In Which of the Following Ways Can a Government Assure

question 48

Multiple Choice

In which of the following ways can a government assure that a natural monopolist earns zero economic profit?

• A)by setting the price equal to marginal cost
• B)by setting the price equal to average total cost
• C)by setting the price lower than the average total cost
• D)by asking the monopolist to produce where marginal cost is equal to marginal revenue
• E)by asking the monopolist to produce where marginal cost is equal to average total cost

---

Definitions:

Decreased Competition

A market condition where there is a reduction in the number or intensity of competitors, often leading to increased prices and reduced consumer choice.

Competing Style

A conflict resolution approach where one party seeks to achieve their goals at the expense of others, showing a high concern for personal goals and low concern for relationships.

Decisive Action

Taking firm and clear actions in a swift manner to resolve an issue, make a choice, or advance towards a goal.

Temporary Solutions

Short-term fixes intended to address problems until more permanent solutions can be implemented.