If a Natural Monopoly Is Forced to Follow a Policy

question 232

Multiple Choice

If a natural monopoly is forced to follow a policy of average-cost pricing, the monopolist will

• A) earn economic profits greater than zero.
• B) charge a higher price than if the monopolist were not regulated.
• C) charge a lower price than if the monopolist were not regulated.
• D) decrease output below that in an unregulated pricing policy.

---

Definitions:

Focused Freewriting

A writing strategy involving continuous, nonjudgmental writing focusing on a particular subject or question.

Brainstorming

A method for collective creativity aimed at producing a vast array of solutions to a particular issue.

Clustering

The process of grouping a set of objects in such a way that objects in the same group are more similar to each other than to those in other groups.

Freewriting

A writing strategy where a person writes continuously for a set period of time without regard for spelling, grammar, or topic, to generate ideas or overcome writer's block.