If the government forces a natural monopoly to produce the output level at which P = MC,the firm will

Name: If the government forces a natural monopoly to produce the output level at which P = MC,the firm will
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When a natural monopoly is forced to produce where price equals marginal cost (P = MC), it incurs losses because the average cost is higher than the marginal cost at that output level, leading to a situation where the firm cannot cover its total costs.

If the Government Forces a Natural Monopoly to Produce the Output