If regulators want to allow monopolists to keep some of the benefits from lower costs in the form of higher profit:

Question

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Marginal-cost pricing is the pricing strategy where the price is set equal to the marginal cost of producing an additional unit of output. This approach does not allow for any markup or profit. If regulators want to allow monopolists to keep some of the benefits from lower costs, a departure from marginal-cost pricing is required. This means that the pricing strategy will need to incorporate some markup or profit margin. This will enable the monopolist to benefit from the cost savings while still earning some profit.

If Regulators Want to Allow Monopolists to Keep Some of the Benefits