In regulating a natural monopoly, the price strategy that ensures ...

[iveyjurea]

In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price
 
  A) corresponding to the demand curve where marginal revenue equals zero.
  B) equal to average variable cost where it intersects the demand curve.
  C) equal to average total cost where it intersects the demand curve.
  D) equal to marginal cost where it intersects the demand curve.

Question 2

The bargaining power of suppliers increases if
 
  A) the input supplied is relatively standardized.
  B) the input in question is not a critical component of production.
  C) the cost of switching suppliers is relatively low.
  D) there are only a few competitors to the supplier.

[kbennett34]

Answer to Question 1

C

Answer to Question 2

D