Average Cost Regulation of a Natural Monopoly Does Not Involve

question 130

Multiple Choice

Average cost regulation of a natural monopoly does not involve:

• A) production at a socially inefficient level of output.
• B) a tendency for average total cost curves to shift upward over time.
• C) a subsidy.
• D) production at the output level at which demand intersects the average total cost curve.

---

Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, helping to prepare the books for the next period.

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse certain adjusting entries made in the previous period.

T-Accounts

A graphic representation of a general ledger account that outlines the debit and credit sides to visualize the effect of transactions on the account.

Reversing Entries

Entries executed at the onset of an accounting cycle to annul or reverse the adjusting records that were established at the end of the last period.