Multiple Choice
Watt Power and Light, an electric company, will suffer an economic loss
A) even at its profitmaximizing output because marginal cost is always less than average cost
B) even at its profitmaximizing 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:
Verified
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