When promoting average cost pricing, regulators A) include ...

[Diane]

When promoting average cost pricing, regulators
 
  A) include what they consider to be a normal rate of return on investment.
  B) encourage firms to produce at the output level where price equals marginal cost.
  C) fail to consider a return to investors, so regulated firms often have a hard time raising investment funds.
  D) inflate costs so much that price ends up as large as would prevail under unregulated monopoly.

Question 2

Because there are low barriers to entry in a monopolistically competitive market
 
  A) there are many firms in the industry.
  B) they produce a homogeneous product.
  C) the firms are price takers.
  D) there is no non-price competition.

[paavo]

Answer to Question 1

A

Answer to Question 2

A

[Diane]

Gracias!

[okolip]

Excellent