An average cost pricing rule sets ________ equal to average total cost.An average cost pricing rule is not an efficient way of regulating monopoly because at the quantity produced,________.
A)price;marginal benefit exceeds marginal cost
B)the return on capital;marginal benefit exceeds marginal cost
C)marginal cost;marginal cost exceeds marginal benefit
D)price equal to marginal revenue,which in long-run equilibrium is;marginal cost exceeds marginal benefit
E)marginal cost;marginal benefit exceeds marginal cost

Question

Quizplus · Accepted Answer

An average cost pricing rule sets price equal to average total cost. It is not an efficient way of regulating monopoly because at the quantity produced, marginal benefit exceeds marginal cost, indicating that not enough of the good is being produced to maximize welfare.

An Average Cost Pricing Rule Sets ________ Equal to Average