13) Economic efficiency requires that a natural monopoly’s price be a. equal to the lowest price...

13) Economic efficiency requires that a natural monopoly’s price be a. equal to the lowest price the firm can charge and still make a normal profit. b. equal to average variable cost (AVC) where the AVC curve intersects the demand curve. c. equal to average total cost (ATC) where the ATC curve intersects the demand curve. d. equal to marginal cost (MC) where the MC curve intersects the demand curve.

Expert Solution

Economic efficiency means where no one can be made better off without worsening other. It means maximisation of total surplus. Thus economic efficiency is achieved when average revenue curve intersects the MC curve.

ans is D

Rahul Sunny answered 2 years ago

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