Under an average-cost pricing policy,the government picks the price at which the market demand curve intersects the monopolist's long-run average-cost curve.

Question

Quizplus · Accepted Answer

Under average-cost pricing policy, the government sets the price at the point where the long-run average cost curve intersects the demand curve, ensuring that the monopolist earns a normal profit. Therefore, the statement is true.

Under an Average-Cost Pricing Policy,the Government Picks the Price at Which