When monopolies exist because economies of scale prevail over the entire range of demand:
A) they will charge prices too low to achieve the efficient level of output.
B) even then, economists insist that they do not serve a useful role.
C) economists suggest that we may want to regulate their production and pricing, but we may not want to give up their cost advantages.
D) ATC is likely to exceed price.

Question

Quizplus · Accepted Answer

Economists suggest that regulating the production and pricing of monopolies may be necessary to prevent them from charging excessively high prices and restricting output. However, it is also important to recognize that monopolies may have cost advantages due to economies of scale, and completely eliminating them may not be desirable. Therefore, regulating them may strike a balance between promoting competition and efficiency while also avoiding potential drawbacks of eliminating their cost advantages.

When Monopolies Exist Because Economies of Scale Prevail Over the Entire