The Figure Below Shows Revenue and Cost Curves of a Natural

question 74

Multiple Choice

The figure below shows revenue and cost curves of a natural monopoly firm. Figure 26.1 In the figure,
D: Demand curve
MR: Marginal revenue curve
MC: Marginal cost curve
ATC: Average total cost curve
According to Figure 26.1, to attain allocative efficiency the regulatory body must attempt to set the price equal to:

• A)P₂.
• B)P₃.
• C)P₁.
• D)P₄.
• E)P₅.

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Definitions:

Self-discipline

The ability to work systematically and progressively toward a goal until it is achieved.

Extinction

The weakening or decreasing of the frequency of undesirable behavior by removing the reward for such behavior.

Positive Reinforcement

A technique used in behavior psychology to increase the likelihood of a desirable behavior by rewarding it.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.