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-In the Above Figure, If the Natural Monopoly Is Regulated

question 300

Multiple Choice

  -In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, then the firm will produce A)  8 million units and set a price of $21 per unit. B)  12 million units and set a price of $18 per unit. C)  16 million units and set a price of $16 per unit. D)  nothing unless the government provides subsidies to cover its losses.
-In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, then the firm will produce

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