If Government Regulators Make the Natural Monopolist Set Price Equal

question 124

Multiple Choice

If government regulators make the natural monopolist set price equal to marginal cost

• A) the natural monopolist will make zero economic profits.
• B) the natural monopolist will make normal profits.
• C) the natural monopolist will make losses and go out of business.
• D) the natural monopolist will make positive economic profits larger than if it wasn't regulated at all.

---

Definitions:

Trade Policies

Government rules and regulations that determine the international trade activities of a country, affecting exports and imports.

Different Values

Refers to the varying valuations or worth assigned by individuals or markets to goods, services, or assets.

Infinite

Without limit or end; extending beyond any finite value or measurable space.

Horizontal Line

A straight line that has a zero slope and runs parallel to the horizontal axis in a graph.