Since Natural Monopolies Have a Declining Average-Cost Curve,what Effect Would

question 82

Multiple Choice

Since natural monopolies have a declining average-cost curve,what effect would regulating natural monopolies by setting price equal to marginal cost have

• A)It would cause the monopolist to operate at a loss.
• B)It would result in a less than optimal total surplus.
• C)It would maximize producer surplus.
• D)It would encourage research in order to recoup lost profits.

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