Because a monopolist has no incentive to control costs under a policy of average-cost pricing, we can expect

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If a monopolist sets prices at the average cost, it will not have any incentives to control costs, resulting in the costs increasing over time. As a result of the increase in costs, the monopolist will raise the price, leading to an increase in profits. Therefore, we can expect the price to increase over time as costs rise.

Because a Monopolist Has No Incentive to Control Costs Under