Producing at the point where price equals marginal cost will always result in
A) economic losses for a natural monopoly.
B) economic losses for a monopoly.
C) economic profit for a natural monopoly.
D) economic profit for a perfectly competitive firm.
E) a surplus minimizing outcome.

Question

Quizplus · Accepted Answer

Producing where price equals marginal cost for a natural monopoly typically results in economic losses because the average cost is higher than the marginal cost due to economies of scale.

Producing at the Point Where Price Equals Marginal Cost Will