"If a Natural Monopoly Is Regulated Using a Marginal Cost

question 71

Essay

"If a natural monopoly is regulated using a marginal cost pricing rule,the firm makes zero economic profit." Is the previous statement correct or incorrect? Explain your answer.

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Definitions:

Reinforcement

In behavioral psychology, it is the process of encouraging or establishing a pattern of behavior by offering rewards or consequences.

Skinner's Theory

Another term for Skinner's Radical Behaviorism, focusing on the importance of observable behavior and the use of reinforcement methods for behavior modification.

Kelly's Personal Construct Theory

A theory by George Kelly suggesting that individuals use personal constructs, which are mental models, to interpret and predict the world.

Superordinate Constructs

High-level, abstract concepts or categories that help organize more specific or subordinate information in cognitive psychology and social sciences.