In which of the following ways can a government assure that a natural monopolist earns zero economic profit?
A) by setting the price equal to marginal cost
B) by setting the price equal to average total cost
C) by setting the price lower than the average total cost
D) by asking the monopolist to produce where marginal cost is equal to marginal revenue
E) by asking the monopolist to produce where marginal cost is equal to average total cost
Correct Answer:
Verified
Q42: Suppose the local government is considering using
Q43: Compared to the profit-maximizing outcome,average-cost pricing in
Q44: Which of the following is true when
Q45: When government regulations force a natural monopoly
Q46: If a natural monopolist switches to marginal
Q48: Production by a monopolist would result in
Q49: Exhibit 15.4 Q50: A regulated natural monopoly that must set Q51: Exhibit 15.3 Q52: Governments often enact regulations that benefit producers
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