In Regulating a Natural Monopoly,the Price Strategy That Ensures the Highest

question 165

Multiple Choice

In regulating a natural monopoly,the price strategy that ensures the highest possible output and zero profit is one that sets price

• 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) corresponding to the point on the demand curve where marginal revenue equals zero.

---

Definitions:

Mixture

A combination of two or more substances in which each substance retains its chemical identity and properties.

Homogeneous Mixture

A homogeneous mixture is a mixture in which the composition is uniform throughout, and the individual components are not visibly distinguishable.

Heterogeneous Mixture

A combination of substances that are not uniformly distributed and in which the individual components can be distinguished physically.

Nitrogen

A colorless, odorless gas that is the most abundant element in the Earth's atmosphere, essential for plant and animal life.