A regulated natural monopoly that must set price equal to average cost will
A)suffer an economic loss
B)earn a net economic profit
C)earn a normal profit
D)earn so little that it will close in the long run
E)earn no profits of any kind

Question

Quizplus · Accepted Answer

Setting price equal to average cost will allow the regulated natural monopoly to earn a normal profit. This means that the monopoly will not be earning excess profits or experiencing losses.

A Regulated Natural Monopoly That Must Set Price Equal to Average