If regulators set price equal to marginal cost, then a natural monopolist will earn exactly zero profit.

Name: If regulators set price equal to marginal cost, then a natural monopolist will earn exactly zero profit.
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Quizplus · Accepted Answer

A natural monopolist has decreasing average total costs over the relevant range of output, so if price is set equal to marginal cost, the price will be below average total cost, leading to losses, not zero profit.

If Regulators Set Price Equal to Marginal Cost, Then a Natural