Earning-Sharing Regulation Involves

question 126

Multiple Choice

Earning-sharing regulation involves

• A) setting the monopoly's price equal to its average total cost.
• B) requiring that the monopoly share its profits with its customers if the profits rise above a certain level.
• C) setting a maximum price the monopoly may charge and maintaining it for many years.
• D) assuming a natural monopoly will not charge a higher than profit-maximizing price.
• E) setting the monopoly's price equal to its marginal cost.

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