Which of the Following Statements Correctly Identifies the Problem with Regulating

question 71

Multiple Choice

Which of the following statements correctly identifies the problem with regulating a natural monopoly?

• A)It is difficult to identify a natural monopoly.
• B)If a natural monopoly lowers its prices,it will have to shut down to cut losses.
• C)The real cost of serving the market will be higher if there is more than one firm.
• D)The cost of regulating a natural monopoly is lower than the welfare cost.

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