Profit regulation of a natural monopoly is achieved when

Question

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Profit regulation of a natural monopoly is achieved when P=ATC. This ensures that the price charged by the monopoly is equal to its average total cost, allowing the monopoly to earn a normal rate of return while also preventing it from earning excessive profits. Setting price equal to marginal cost (B) would result in the monopoly operating at a loss, while setting MR=MC (C) would result in the monopoly earning zero economic profit.

Profit Regulation of a Natural Monopoly Is Achieved When