If a Regulator Sets the Price Equal to the Natural

question 136

Multiple Choice

If a regulator sets the price equal to the natural monopolist's marginal cost,

• A)the monopoly will experience a loss
• B)the monopoly will earn a profit
• C)the monopoly will earn zero profit
• D)consumers will be worse off than they would be if the firm's profit maximization activities were unregulated
• E)the monopoly will be better off than it would be if its profit maximization activities were unregulated

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