-If a marginal cost pricing rule is imposed on the natural monopoly shown in the figure above, then the deadweight loss will equal
A) $0.
B) $4 million.
C) $8 million.
D) $12 million.

Question

-If a marginal cost pricing rule is imposed on the natural monopoly shown in the figure above, then the deadweight loss will equal
A) $0. 
B) $4 million. 
C) $8 million. 
D) $12 million.

Quizplus · Accepted Answer

A marginal cost pricing rule eliminates deadweight loss by setting the price equal to the marginal cost, leading to an efficient allocation of resources with no deadweight loss.

-If a Marginal Cost Pricing Rule Is Imposed on the Natural