"If a Natural Monopoly Is Regulated Using a Marginal Cost

question 297

Essay

"If a natural monopoly is regulated using a marginal cost pricing rule, the firm makes zero economic profit." Is the previous statement correct or incorrect?

---

Definitions:

Role Model

An individual whose behavior, example, or success is or can be emulated by others, especially younger people.

Visual Preference

The tendency to preferentially pay attention to certain visual stimuli over others, often studied in the context of infant and child development.

Stimulus

Any external or internal event or factor that can provoke a response from an organism or a system.

High-Amplitude Sucking

A method used in developmental research where infants control the presentation of stimuli by varying their sucking strength.