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Suppose That a Regulated Natural Monopolist Has $1 Million in Physical

Question 172

Multiple Choice

Suppose that a regulated natural monopolist has $1 million in physical assets,produces 10,000 units and has total explicit costs of $100,000.If the monopolist is allowed a 10% return on his investment in capital,his cost-plus price will be


A) $10.00.
B) $10.10.
C) $11.00.
D) $20.00.
E) $20.20.

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