Production costs are likely to rise after an average-cost pricing policy is mandated because the monopolist will

Name: Production costs are likely to rise after an average-cost pricing policy is mandated because the monopolist will
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Question

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With an average-cost pricing policy, the monopolist is guaranteed to earn a certain level of profit regardless of the production costs. Therefore, the monopolist has no incentive to control costs, which can lead to higher production costs over time.

Production Costs Are Likely to Rise After an Average-Cost Pricing