Economic Efficiency Requires That a Natural Monopoly's Price Be

question 230

Multiple Choice

Economic efficiency requires that a natural monopoly's price be

• A)equal to average total cost where it intersects the demand curve.
• B)equal to marginal cost where it intersects the demand curve.
• C)equal to average variable cost where it intersects the demand curve.
• D)equal to the lowest price the firm can charge and still make a normal profit.

---

Definitions:

Glass-Steagall Act

An act of Congress in 1933 that separated investment banking from retail banking to reduce financial speculative bubbles and prevent bank failures.

Commercial Banking

Banking services provided to businesses and individuals, including deposit taking, lending, and various other financial transactions.

Investment Banking

A sector of the banking industry that deals with the creation of capital for other companies, governments, and other entities.

Investment Bankers

Professionals who work in financial institutions, facilitating mergers, acquisitions, and the issuance of securities.