For a Natural Monopoly Where Average Cost Declines After Intersecting

question 60

Multiple Choice

For a natural monopoly where average cost declines after intersecting the demand curve,marginal-cost pricing would lead to:

• A)a horizontal demand curve.
• B)a surplus and a consequent fall in price.
• C)an economic loss for the firm.
• D)a higher price than under average-cost pricing.

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