Multiple Choice
The figure below shows revenue and cost curves of a natural monopoly firm.Figure 14.1
In the figure,
D: Demand curve
MR: Marginal revenue curve
MC: Marginal cost curve
ATC: Average total cost curve
-According to Figure 14.1, in order to attain allocative efficiency, the regulatory body must attempt to set the price equal to:
A) P2.
B) P3.
C) P1.
D) P4.
E) P5.
Correct Answer:
Verified
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