The natural monopoly:
A) would incur an economic profit if regulated to produce where price is less than marginal cost.
B) would incur an economic profit if regulated to charge a price equal to average total cost.
C) generates more consumer surplus than would an unregulated monopolist if regulated to produce where price equals average total cost.
D) generates more consumer surplus than would an unregulated monopolist if regulated to produce where marginal cost equals marginal revenue.
Correct Answer:
Verified
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Figure: Demand,Revenue,and
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Figure: Demand,Revenue,and
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Figure: Demand,Revenue,and
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