What Is the Drawback of Forcing a Natural Monopolist to Use

question 78

Multiple Choice

What is the drawback of forcing a natural monopolist to use a marginal cost pricing rule?

• A) No deadweight loss is eliminated.
• B) The gain in consumer surplus will be less than the loss in producer surplus, thus creating additional deadweight loss.
• C) The firm will incur an economic loss.
• D) None of the above answers is correct.

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