Author Question: What is the drawback of forcing a natural monopolist to use a marginal cost pricing rule? A) No ... (Read 124 times)

skymedlock · **on:** Jun 29, 2018

What is the drawback of forcing a natural monopolist to use a marginal cost pricing rule?

A) No deadweight loss is eliminated.
B) The firm will incur an economic loss.
C) The gain in consumer surplus will be less than the loss in producer surplus, thus creating additional deadweight loss.
D) None of the above answers is correct.

Question 2

The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal social benefit is

A) zero.
B) 14,000.
C) 19,000.
D) 16,000.