When an average cost pricing rule is imposed on a natural monopoly, ________
A) total surplus is maximized and the monopoly incurs an economic loss
B) the monopoly makes zero economic profit
C) the monopoly makes an economic profit
D) total surplus is maximized and the monopoly makes an economic profit
B
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Alan's Roast House sells roasted peanuts in a competitive market. The firm employs labor ata wage rate of $6 per hour and rents capital for $15 per hour
At its current level of labor and capital, the marginal product of labor is 12 and the marginal product of capital is 40 . Is the firm currently maximizing profit? Explain.
Fashion trends are a nonprice determinant for demand because
A) they cause a movement along the demand curve. B) they influence people's tastes and preferences in clothing. C) they change the supply of accessories. D) they do not affect demand.