Economic efficiency requires that a natural monopoly's price be
A) equal to average total cost where it intersects the demand curve.
B) equal to marginal cost where it intersects the demand curve.
C) equal to average variable cost where it intersects the demand curve.
D) equal to the lowest price the firm can charge and still make a normal profit.
Answer: B
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In first degree price discrimination,
a. each consumer pays the same price. b. all consumer surplus is captured by the seller. c. the seller separates the buyers into different groups. d. the seller charges different prices per unit for different quantities.
The long-run equilibrium level of RGDP only changes when the LRAS shifts
a. True b. False Indicate whether the statement is true or false
If consumption is $7000, exports are $600, government purchases are $2000, government transfers are $900, imports are $800, and investment is $1000, then GDP is $9,800
a. True b. False Indicate whether the statement is true or false
Consider a $2 billion open market purchase of U.S. Treasury securities by the Federal Reserve. The Banking System's balance sheet will specifically show:
A. no net change in assets or liabilities, only a change in the composition of assets with securities increasing and reserves decreasing by $2 billion respectively. B. only an increase in liabilities of $2 billion. C. only a decrease in assets of $2 billion. D. no net change in assets or liabilities, only a change in the composition of assets with securities decreasing and reserves increasing by $2 billion respectively.