An argument for making regulated monopolies adopt marginal-cost pricing is that this would

A) increase productive efficiency by making price equal average cost.
B) benefit higher-income groups by making monopoly products more affordable.
C) increase managerial incentives to reduce employment and production.
D) make the marginal cost equal to society's valuation of the marginal benefit.

Question

Quintrell Perrilloux · Accepted Answer

Final Answer : D, Explanation :  Marginal-cost pricing ensures that the price of a product or service is set equal to the marginal cost of producing an additional unit. This aligns the price with the societal valuation of the marginal benefit, as consumers are willing to pay a price that reflects the cost of producing one more unit of the good or service. This approach promotes allocative efficiency by ensuring that resources are allocated to their most valued uses.

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