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.

---

Definitions:

Communist and socialist unions

Labor organizations that operate based on communist or socialist principles, advocating for the collective ownership of the means of production and equal distribution of wealth.

Collective bargaining

A process where employers and representatives of employees negotiate wages, working conditions, and other terms of employment.

Legitimizes capitalism

The process or argument by which capitalism is defended or justified as the preferable economic system, often in relation to its ability to promote economic growth and freedom.

Monopolistic power

The ability of a single entity to control or dominate a market, setting prices and limiting competition.