The Public Service Company of Colorado is a natural monopoly in the transmission and distribution of electric power. As such, it will incur an economic loss if it
A) goes out of business.
B) prices its services at average total cost.
C) prices its services at marginal cost.
D) all of the above

Question

Quizplus · Accepted Answer

Pricing at marginal cost would not cover the total costs, including fixed costs, leading to an economic loss.

The Public Service Company of Colorado Is a Natural Monopoly