-Refer to the Above Figure $\mathrm { P } _ { 5 }$

question 160

Multiple Choice

-Refer to the above figure.If the government requires the natural monopolist to charge the efficient price,it will charge price

• A) \(\mathrm { P } _ { 5 }\) and sell \(\mathrm { Q } _ { 1 }\) units.
• B) \(P _ { 2 }\) and sell \(\mathrm { Q } _ { 1 }\) units.
• C) \(\mathrm { P } _ { 3 }\) and sell \(\mathrm { Q } _ { 3 }\) units.
• D) \(P _ { 1 }\) and sell \(\mathrm { Q } _ { 4 }\) units.

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Definitions:

Payback Period

The duration needed to recoup the expenses of an investment.

Simple Rate of Return

A financial metric used to evaluate the efficiency of an investment or to compare the efficiencies of several investments, calculating net annual profit divided by initial investment cost.

Depreciates Assets

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Discount Rate

The interest rate used to discount future cash flows to present value, often used in investment and project valuation.