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When Regulating a Natural Monopoly,government Officials

Question 55

Multiple Choice

When regulating a natural monopoly,government officials


A) can set an efficient price,but the firm will suffer a loss
B) can arrange a Pareto improvement by leaving the firm alone
C) should force the firm to set a price equal to minimum marginal cost
D) should force the firm to set a price equal to minimum long-run average total cost
E) will increase efficiency if they force the firm to produce where MR = MC.

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