If a natural monopolist were to sell at the price where marginal cost equals demand,then it would be earning
A) zero economic profits,like a competitive firm in the long-run.
B) negative profits and would not be able to survive.
C) positive profits but not would not need to worry about government intervention to regulate it.
D) positive profits but would still need to worry about possible government intervention to regulate it.

Question

Quizplus · Accepted Answer

A natural monopolist's average total cost curve typically remains above the demand curve at the point where marginal cost equals demand. Selling at this price would mean the firm is not covering its average total costs, leading to losses.

If a Natural Monopolist Were to Sell at the Price