Which of the following is NOT a limitation that regulators face when they implement average cost pricing?
A) Decisions are political and often influenced by special interests.
B) Firms do not cover their opportunity costs for all resources.
C) The accurate calculation of a firm's costs is difficult.
D) Average cost pricing provides little or no incentive for firms to keep costs down.

Question

Quizplus · Accepted Answer

This statement is actually a limitation of the firms, not regulators. The correct limitation that regulators face is that average cost pricing provides little or no incentive for firms to keep costs down. A, C, and D are all correct limitations that regulators face when implementing average cost pricing.

Which of the Following Is NOT a Limitation That Regulators