The government will have to subsidize a natural monopoly in the long run if regulators choose to pursue:

Question

Quizplus · Accepted Answer

Marginal cost pricing in the context of a natural monopoly means setting prices equal to the marginal cost of production, which is often below the average total cost in such industries. This leads to losses for the monopoly, necessitating government subsidies to sustain operations in the long run.

The Government Will Have to Subsidize a Natural Monopoly in the Long