If a Natural Monopoly Is Regulated Using

question 236

Multiple Choice

If a natural monopoly is regulated using

• A) a marginal cost pricing rule, the firm maximizes its profit.
• B) an average cost pricing rule, the firm incurs an economic loss.
• C) a total cost pricing rule, the firm will exit the industry.
• D) a marginal cost pricing rule, the firm incurs an economic loss.
• E) an average cost pricing rule, the firm maximizes its profit.

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