Governments regulate natural monopoly by capping the price at ...

[DyllonKazuo]

Governments regulate natural monopoly by capping the price at _____.
 
  A. marginal revenue and allowing the monopoly to maximize profit
  B. marginal cost so that the monopoly is efficient and makes zero eco-nomic profit
  C. average total cost, which allows the monopoly to be inefficient but make zero economic profit
  D. the buyers' willingness to pay, which makes the monopoly operate efficiently

Question 2

Limits on the flow of foreign exchange and financial investment across countries are called
 
  A) currency restrictions. B) credit constraints.
  C) fixed exchange rates. D) capital controls.

[leahchrapun]

Answer to Question 1

C Figure 12.12 illustrates the effects of using an average cost pricing rule to regulate the natural monopoly.

Answer to Question 2

D

[DyllonKazuo]

TYSM

[Bigfoot1984]

Gracias!