If a Regulatory Board Wanted to Make Sure That a Natural

question 48

Multiple Choice

If a regulatory board wanted to make sure that a natural monopoly chose a price resulting in the efficient level of output, it should set a price equal to:

• A)marginal cost.
• B)average fixed cost.
• C)average variable cost.
• D)average total cost.
• E)average total cost, plus a ten percent normal return on investment.