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Watt Power and Light,an Electric Company,is an Example of a Natural

Question 33

Multiple Choice

Watt Power and Light,an electric company,is an example of a natural monopoly.It will suffer an economic loss _____


A) irrespective of the output it produces because marginal cost is always less than average cost.
B) irrespective of the price it charges 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.

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