If Average Total Costs for a Natural Monopoly Are Declining

question 61

Multiple Choice

If average total costs for a natural monopoly are declining where they intersect the demand curve, and government regulators set the price equal to marginal cost, then the firm will

• A)likely earn a profit.
• B)likely break even.
• C)likely suffer a loss.
• D)surely go out of business.
• E)There is not enough information to answer this question.

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