2.4 Using the figure in the Mini-Case, Natural Gas Regulation, show how much consumer surplus increases if

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2.4 Using the figure in the Mini-Case, “Natural Gas Regulation,” show how much consumer surplus increases if regulators require the producer to change from average cost pricing to marginal cost pricing. Explain why, despite this difference in consumer surplus, regulators generally prefer average cost pricing to marginal cost pricing.

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Managerial Economics And Strategy

ISBN: 9780135640944

2nd Global Edition

Authors: Jeffrey M. Perloff, James A. Brander

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