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Use the Figure Below to Answer the Following Questions

Question 104

Multiple Choice

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 12.5.2 -Consider the natural monopoly depicted in Figure 12.5.2.If a regulatory agency sets a price just sufficient for the firm to make zero economic profit,and if the firm inflates its costs as much as possible,the regulated price will be A) P<sub>0</sub>. B) P<sub>1</sub>. C) P<sub>2</sub>. D) P<sub>3</sub>. E) either P<sub>0</sub> or P<sub>3</sub>. Figure 12.5.2
-Consider the natural monopoly depicted in Figure 12.5.2.If a regulatory agency sets a price just sufficient for the firm to make zero economic profit,and if the firm inflates its costs as much as possible,the regulated price will be


A) P0.
B) P1.
C) P2.
D) P3.
E) either P0 or P3.

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