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Watt Power and Light, an Electric Company, Will Suffer an Economic

Question 39

Multiple Choice

Watt Power and Light, an electric company, will suffer an economic loss

A) even at its profit-maximizing output because marginal cost is always less than average cost
B) even at its profit-maximizing output because average cost is always less than marginal cost
C) if regulators insist that it produce where price equals marginal cost because marginal cost is less than average cost
D) if regulators insist that it produce where price equals marginal cost because average cost is always less than marginal cost
E) if regulators insist that it produce where price equals average cost because average cost is always less than marginal cost

Correct Answer: