-In the above figure, if the natural monopoly is regulated with a marginal cost pricing rule, then the deadweight loss to society is
A) zero.
B) ecf.
C) gde.
D) efcb.

Question

-In the above figure, if the natural monopoly is regulated with a marginal cost pricing rule, then the deadweight loss to society is
A) zero. 
B) ecf. 
C) gde. 
D) efcb.

Quizplus · Accepted Answer

With marginal cost pricing, the price is equal to the marginal cost, which is equal to the height of the demand curve at the quantity produced. Therefore, the deadweight loss is zero.

-In the Above Figure, If the Natural Monopoly Is Regulated