Regulatory commissions may focus on establishing a "fair-return" price to be charged by a monopolist. Under this policy, the monopolist would earn:
A) positive economic profits.
B) zero economic profits.
C) negative economic profits.
D) monopoly profits.

Question

Quizplus · Accepted Answer

The "fair-return" price policy aims to set a price that allows the monopolist to earn enough revenue to cover its costs and provide a reasonable return on investment, but not to earn excessive profits at the expense of consumers. Therefore, the monopolist would earn zero economic profits under this policy.

Regulatory Commissions May Focus on Establishing a "Fair-Return" Price to Be