The Averch-Johnson Effect Refers to

The Averch-Johnson effect refers to

A) the inefficiencies that result when regulators set public utility rates too high or too low.
B) the tendency toward natural monopoly in firms that have downward-sloping long-run average cost curves.
C) the 9- to 12-month time lag between recognition of a need for rate revision and action by regulatory commissions.
D) All of the above are correct.