Which of the Following Is a Criticism of Average-Cost Pricing

question 34

Multiple Choice

Which of the following is a criticism of average-cost pricing as a regulatory response to a natural monopoly?

• A) With average-cost pricing, output produced is smaller than the efficient level of output.
• B) Firms that practice average-cost pricing suffer persistent losses.
• C) Imperfect information about the firm's costs reduces the effectiveness of average-cost pricing.
• D) Under average-cost pricing, the market price is lower than the efficient price.
• E) Answers with average-cost pricing, output produced is smaller than the efficient level of output and imperfect information about the firm's costs reduces the effectiveness of average-cost pricing are both correct.

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Definitions:

Isometric Contractions

Isometric contractions involve the muscle generating tension without changing its length, often used in strength training exercises.

Motor Units

A single motor neuron and all the muscle fibers it innervates, functioning as the basic functional unit in muscle contraction.

Muscle Twitches

Involuntary, fine movements of a small area of muscle, often caused by stress, fatigue, or mineral imbalances.

All-Or-None Principle

When a stimulus is applied to a cell, an action potential is either produced or not. In muscle cells, the cell either contracts to the maximum extent possible (for a given condition) or does not contract.