Compared to the profit-maximizing outcome, marginal cost pricing in natural monopoly leads to
A)reduced demand
B)higher price
C)reduced consumer surplus
D)more economic profit
E)greater output

Question

Quizplus · Accepted Answer

Marginal cost pricing in a natural monopoly typically results in greater output because it sets the price equal to the marginal cost, leading to increased production compared to the profit-maximizing level where price exceeds marginal cost.

Compared to the Profit-Maximizing Outcome, Marginal Cost Pricing in Natural