Economic efficiency requires that a natural monopoly's price be
A) equal to average total cost where it intersects the demand curve.
B) equal to marginal cost where it intersects the demand curve.
C) equal to average variable cost where it intersects the demand curve.
D) equal to the lowest price the firm can charge and still make a normal profit.
Answer: B
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In economic theory, we assume that the goal of the firm is to:
a. maximize sales revenue. b. maximize market share. c. maximize the benefits it provides to its customers. d. maximize the profit. e. maximize the sales volume.
Countries are divided into groups based on income. What income group is most common?
a. middle income ($1,025-$12,475 GDP/capita) b. low income (less than $1,025 GDP/capita). c. high income (greater than $12,475 GDP/capita). d. high and low income groups have the same number.