Author Question: If a natural monopoly has an average cost pricing rule imposed, the rule will A) maximize total ... (Read 146 times)

Chloeellawright · **on:** Jun 29, 2018

If a natural monopoly has an average cost pricing rule imposed, the rule will

A) maximize total surplus in the regulated industry.
B) generate an economic loss for the regulated firm.
C) reduce the consumer surplus and generate a deadweight loss when compared to a marginal cost pricing rule.
D) set price below marginal cost.

Question 2

The table above shows the marginal private benefit, marginal social benefit, and marginal cost of education at the College of Epsilon. What is the equilibrium number of students at the college if the market is unregulated?

A) 1,000
B) 3,000
C) 4,000
D) 5,000