There is no deadweight loss if the regulatory rule for a natural ...

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There is no deadweight loss if the regulatory rule for a natural monopoly
 
  A) is an average cost pricing rule.
  B) sets price at a level that enables the regulated firm to earn a specified rate of return on its capital.
  C) is a marginal cost pricing rule.
  D) prevents the firm from engaging in any form of price discrimination.

Question 2

With respect to redistribution, one reason The Big Tradeoff exists is because
 
  A) government programs employ resources that could have been productive elsewhere.
  B) government policymakers must choose between funding the various programs.
  C) government programs only employ resources that had no value to society otherwise.
  D) government programs only pay workers their opportunity cost.

[Dinolord]

Answer to Question 1

C

Answer to Question 2

A