-If a Marginal Cost Pricing Rule Is Imposed on the Natural

question 523

Multiple Choice

-If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the firm will

• A) incur an economic loss.
• B) make zero economic profit, that is, its owners make a normal profit.
• C) make an economic profit of $4 million.
• D) make an economic profit of $16 million.