-The figure above shows the demand curve (D) faced by Visual, Inc., a cable TV company, and the firm's marginal revenue (MR), marginal cost (MC), and average cost (LRAC) curves. If Visual is regulated according to an average cost pricing rule, there will be
A) a deadweight loss of $6 million per month.
B) a deadweight loss of $24 million per month.
C) a deadweight loss of $12 million per month.
D) no deadweight loss.

Question

-The figure above shows the demand curve (D) faced by Visual, Inc., a cable TV company, and the firm's marginal revenue (MR), marginal cost (MC), and average cost (LRAC) curves. If Visual is regulated according to an average cost pricing rule, there will be
A) a deadweight loss of $6 million per month. 
B) a deadweight loss of $24 million per month. 
C) a deadweight loss of $12 million per month. 
D) no deadweight loss.

Quizplus · Accepted Answer

The Answer of 
-The figure above shows the demand curve (D) faced by Visual, Inc., a cable TV company, and the firm's marginal revenue (MR), marginal cost (MC), and average cost (LRAC) curves. If Visual is regulated according to an average cost pricing rule, there will be
A) a deadweight loss of $6 million per month. 
B) a deadweight loss of $24 million per month. 
C) a deadweight loss of $12 million per month. 
D) no deadweight loss.

-The Figure Above Shows the Demand Curve (D) Faced by Visual