An average-cost pricing policy allows natural monopolies to earn positive economic profits.

Name: An average-cost pricing policy allows natural monopolies to earn positive economic profits.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

An average-cost pricing policy typically allows natural monopolies to cover their costs, including a normal return on investment, but it does not allow for the earning of positive economic profits since prices are set based on the average cost, not above it to generate excess profits.

An Average-Cost Pricing Policy Allows Natural Monopolies to Earn Positive