Which of the Following Is True of a Natural Monopoly

question 168

Multiple Choice

Which of the following is true of a natural monopoly?

• A)If regulated, the firm will have a higher level of output than an unregulated firm, whether the regulation is based on average cost, marginal cost, or normal profit.
• B)If regulated, the firm will have a lower level of output than an unregulated firm, whether the regulation is based on average cost, marginal cost, or normal profit.
• C)If regulated, the firm that is only allowed a normal profit will be allowed to charge a price in excess of its average cost.
• D)If regulated, the firm that is only allowed a normal profit will be allowed to produce more than a firm that must set a price equal to its marginal cost.
• E)If regulated, the firm that is only allowed a normal profit will be allowed to produce more than a firm that must set a price equal to its average cost.

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Definitions:

Sympathy

Feelings of pity and sorrow for someone else's misfortune, often leading to offers of help or support.

Direct Format

A communication method where the main point or conclusion is presented at the beginning, followed by supporting details or evidence.

Bad News Message

Communication designed to convey negative or unfavorable information in a manner that aims to preserve goodwill and minimize harm or backlash.

Transition

The process or period of changing from one state or condition to another.