If average-cost pricing is imposed on a falling-cost natural monopoly,the result will be
A)exit from the industry in the short run.
B)zero economic profit.
C)economic profits.
D)economic losses.
E)losses and exit from the industry in the long run.

Question

Quizplus · Accepted Answer

Average-cost pricing allows the firm to cover its costs, including a normal profit, resulting in zero economic profit.

If Average-Cost Pricing Is Imposed on a Falling-Cost Natural Monopoly,the