The Reason a Profit-Maximizing Natural Monopolist Cannot Set Price Equal

question 164

Multiple Choice

The reason a profit-maximizing natural monopolist cannot set price equal to marginal cost is that it would:

• A) then be forced to produce more than it could sell.
• B) then be forced to produce more than the socially optimal level of output.
• C) earn excessive profits, which would attract new firms into the market.
• D) suffer losses since price would be less than average cost.

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Diabetes mellitus

A metabolic disorder characterized by high blood sugar levels over a prolonged period due to insulin production issues or its action on cells.

Hemophilia

A genetic disorder that impedes the blood's ability to clot normally, causing prolonged bleeding from even slight injuries.

Coagulate

The process by which blood turns from a liquid to a gel, forming clots to prevent excessive bleeding.

Red blood cells

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