In a Natural Monopoly Case, the Socially Optimal Pricing Policy

question 385

True/False

In a natural monopoly case, the socially optimal pricing policy rule will often yield a higher price than the fair-return pricing rule.

---

Definitions:

Producer Surplus

The difference between the amount a producer is paid for a good or service and the minimum amount they are willing to accept for producing it.

Trade

The action of buying, selling, or exchanging goods and services between people, firms, or countries.

Government Revenue

The income received by the government from various sources, including taxes, fees, fines, and the sale of goods and services.

Tariff

A tax imposed by a government on imported goods or services to protect domestic industries or to generate revenue.