When Promoting Average Cost Pricing, Regulators

question 260

Multiple Choice

When promoting average cost pricing, regulators

• A) include what they consider to be a normal rate of return on investment.
• B) encourage firms to produce at the output level where price equals marginal cost.
• C) fail to consider a return to investors, so regulated firms often have a hard time raising investment funds.
• D) inflate costs so much that price ends up as large as would prevail under unregulated monopoly.

---

Definitions:

Elton Mayo

A pioneering researcher in industrial and organizational psychology, known for conducting the Hawthorne Studies which highlighted the importance of social relations in the workplace.

Complex Needs

Situations or conditions that require multiple forms of support or intervention due to their intricate or compounded nature.

Hawthorne Studies

A series of studies conducted in the early 20th century focusing on how work conditions affect employee productivity and morale.

Informal Organization

The ever-changing set of relationships and interactions that are not formally put together; they form naturally in the workplace.