Under fair-return pricing, a regulated natural monopoly will earn zero economic profit.

Name: Under fair-return pricing, a regulated natural monopoly will earn zero economic profit.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Fair-return pricing allows for the natural monopoly to earn a rate of return that covers its costs but does not allow for any extra economic profit. Therefore, under fair-return pricing, the regulated natural monopoly will earn zero economic profit.

Under Fair-Return Pricing, a Regulated Natural Monopoly Will Earn Zero