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kupik [55]
3 years ago
9

If a regulatory commission imposes upon a nondiscriminating natural monopoly a price that is equal to marginal cost and below av

erage total cost at the resulting output, then
Business
1 answer:
denpristay [2]3 years ago
3 0

Answer:

The correct answer is letter "D": The firm must be subsidized or it will go bankrupt.

Explanation:

A subsidy is a benefit given to an individual, business or institution, typically by the government. Subsidies are given to promote a social good or economic policy. The government usually provides subsidies in the form of cash or tax breaks, low-rate loans, and certain types of rebates.

In the example, as the commission sets the price of the monopoly products below the average total cost, it will be translated in losses. Then, a subsidy will be necessary to be provided otherwise the company will file for bankruptcy.

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Answer:

$64.76

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To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

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3 years ago
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