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Gene's Car Wash Is a Natural Monopoly

Question 278

Multiple Choice

Gene's Car Wash is a natural monopoly.To wash 100 cars a week,if Gene is unregulated,he would charge a price of $10.Gene's average total cost for washing 100 cars is $8,his average variable cost is $6,and his marginal cost is $4.If Gene is regulated using an average cost pricing rule,the price he is allowed to charge to wash 100 cars is


A) $10.
B) $8.
C) $6.
D) $4.
E) $400.

Correct Answer:

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