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France regulates the price that its train system can charge, requiring marginal cost pricing. One disadvantage (from the public's perspective) of this form of regulation
France regulates the price that its train system can charge, requiring marginal cost pricing. One disadvantage (from the public's perspective) of this form of regulation is that
A. the train system will provide fewer trips than demanded at the mandated price.
B. marginal revenue will not equal marginal cost.
C. the train system will experience economies of scale in their gas network.
D. the train system will regularly suffer losses, and France would have to subsidize them.
E. deadweight loss is not fully eliminated.
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