Which of the Following Is True About This Firm

question 8

Multiple Choice

Which of the following is true about this firm?

• A)It is a natural monopoly.
• B)Society can benefit from government regulation using marginal cost pricing without a subsidy.
• C)Marginal cost pricing will assure technical efficiency.
• D)Profit regulation will assure allocative efficiency.

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Definitions:

Cost-Benefit Constraint

An accounting principle that suggests weighing the cost of providing financial information against the potential benefit that information offers to users.

Cash Paid

The amount of money disbursed by a business for various purposes, including operating expenses, investments, and financing activities.

Interest

The cost of borrowing money or the payment received for lending money, typically expressed as an annual percentage rate.

Discount on Bonds

The difference between the bond's face value and its selling price when the bond is sold for less than its face value.