Exhibit 25-1 ​

Exhibit 25-1
​

-Refer to Exhibit 25-1. Which of the following statements is false?

A) If marginal-cost pricing is imposed on the natural monopoly firm, the firm takes a loss.
B) If average-cost pricing is imposed on the natural monopoly firm, the firm earns zero economic profits.
C) If the natural monopoly firm produces Q₃ units of output and charges P₃ per unit, the firm earns zero economic profits.
D) a and b
E) a, b, and c