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.

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Definitions:

Breastbone

Also known as the sternum, it is a long flat bone located in the center of the chest, connecting to the ribs via cartilage to form the front part of the rib cage.

Thoracic Cage

The bony frame formed by the ribs, spine, and sternum, which encloses and protects the organs of the thorax.

Thoracic Vertebrae

The twelve vertebrae located in the middle portion of the vertebral column, corresponding to the chest area.

Sternum

The flat bone located in the center of the chest, connecting the rib bones and protecting vital organs in the thoracic cavity.