Author Question: In the long run, the imposition of average-cost pricing in natural monopolies, such as Manitoba ... (Read 54 times)

hjfhdiskkjs · **on:** Oct 12, 2022

Question 1

Suppose your municipality charges your household a flat fee of $100 per year plus $2 per cubic metre of water used. This pricing policy is an example of
◦ a two-part tariff.
◦ marginal-cost pricing.
◦ average cost pricing.
◦ linear pricing.
◦ utility pricing.

Question 2

In the long run, the imposition of average-cost pricing in natural monopolies, such as Manitoba Hydro and New Brunswick Power, would generally lead to
◦ distorted investment decisions.
◦ a reduction in the output by these firms.
◦ allocative efficiency.
◦ productive efficiency.
◦ both allocative efficiency and productive efficiency.

KeriJennin · **Reply #1 on:** Oct 12, 2022

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