A natural monopoly regulated with an average cost pricing rule is ________.
A) efficient and incurs an economic loss
B) inefficient and makes zero economic profit
C) inefficient and makes an economic profit
D) efficient and makes zero economic profit
Question 2
Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased prices for MRI and X-ray machines, then for the health care industry
A) fixed costs are increasing.
B) long run average total cost is decreasing.
C) productivity is increasing.
D) variable costs are increasing.
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