Which of the Following Is True When Regulators Require a Natural

question 9

Multiple Choice

Which of the following is true when regulators require a natural monopolist to set price equal to marginal cost?

• A)This policy results in a less than socially optimal allocation of resources.
• B)The marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit.
• C)The monopolist will face recurring losses unless a subsidy is provided.
• D)The monopolist will earn a normal profit.
• E)The monopolist will earn more than a fair return.

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Definitions:

Actin Fibers

Filamentous proteins that are part of the cytoskeleton in eukaryotic cells, playing a role in cell movement, shape, and division.

Collagen Fibers

Strong, flexible protein fibers found in connective tissue, providing support and structure to skin, bones, and ligaments.

Major Function

The primary role or activity that an organism, system, or component is designed or has evolved to perform.

Abrasion

A wound caused by superficial damage to the skin or a mucous membrane, typically involving a scrape or wear away due to friction.