One method of regulating a natural monopoly is known as average- cost pricing. Using this method, the regulator requires that the price be set equal to average
A) internal cost.
B) variable cost.
C) total cost.
D) marginal cost.
E) fixed cost.

Question

Quizplus · Accepted Answer

Average-cost pricing involves setting the price equal to the average total cost, which includes both fixed and variable costs, ensuring the firm covers all its costs.

One Method of Regulating a Natural Monopoly Is Known as Average-