A firm that is a natural monopoly will:
A)attempt to break even,not profit-maximize.
B)maximize profit by producing where MR = MC.
C)face increasing costs of production.
D)face greater market instability than does a regular monopoly.

Question

Quizplus · Accepted Answer

Natural monopolies maximize profit by producing at the level where marginal revenue (MR) equals marginal cost (MC), similar to other firms in different market structures. This is a fundamental principle of microeconomics that applies broadly across different types of markets, including monopolies.

A Firm That Is a Natural Monopoly Will