The Figure Below Shows Revenue and Cost Curves of a Natural

question 3

Multiple Choice

The figure below shows revenue and cost curves of a natural monopoly firm.Figure 14.1
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In the figure,
D: Demand curve
MR: Marginal revenue curve
MC: Marginal cost curve
ATC: Average total cost curve
-To avoid driving a natural monopolist into bankruptcy, regulatory commissions:

• A)allow the monopolist to enjoy an economic profit.
• B)do not allow the monopolist to make an accounting profit.
• C)subsidize the monopolist to help it break even.
• D)allow the monopolist to earn a fair rate of return.
• E)allow the monopolist to temporarily shut down.

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Definitions:

Magical Thinking

Believing that one’s thoughts, wishes, or desires can influence the physical world or that events are connected in ways that defy scientific principles.

Counterfactual

Thinking that involves imagining alternative scenarios and outcomes that might have happened, but did not.

Short-term Memory

The capacity for holding a small amount of information in an active, readily available state for a short period of time.

Long-term Memory

A type of memory that holds information for a long duration, potentially as long as a lifetime.