If a Natural Monopoly Is Forced to Follow a Policy

question 463

Multiple Choice

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

• A) earn economic profits less than zero.
• B) charge a higher price than if not regulated.
• C) charge the same price as if it were not regulated.
• D) increase output to an amount greater than what it would have produced if it were not regulated.

---

Definitions:

Emotional Reactions

Immediate responses to stimuli or events, varying in intensity, that involve psychological and physiological changes and influencing behavior.

Conscious Recollection

The intentional and aware memory retrieval of specific experiences or information from one's past.

Procedural Memories

Memories for the performance of actions or skills, often known as "muscle memory," which are recalled without conscious awareness.

Well-Learned

The state of having thoroughly practiced or mastered a skill, knowledge, or task through repetition.