A natural monopoly's output is less if it is regulated with A) ...

[SO00]

A natural monopoly's output is less if it is regulated with
 
  A) a marginal cost pricing rule than if it is unregulated.
  B) an average cost pricing rule than if it is unregulated.
  C) an average cost pricing rule than if it is regulated with a marginal cost pricing rule.
  D) a marginal cost pricing rule than if it is regulated with an average cost pricing rule.
  E) More information about the firm's demand is needed to determine how its output depends on what regulation it faces.

Question 2

Which of the following is true?
 
  A) MSC = MC + Marginal external cost
  B) MC = Marginal external cost - MSC
  C) MC = Marginal external benefit + MSC
  D) MSC = Marginal external cost + marginal external benefit
  E) MSC = Marginal external cost - marginal external benefit

[emsimon14]

Answer to Question 1

C

Answer to Question 2

A