When used with a natural monopoly,an average cost pricing rule results in
A) the efficient level of output.
B) economic losses for the firm.
C) the need for government to subsidize the natural monopoly.
D) zero economic profit for the firm.
E) the firm making an economic profit.

Question

Quizplus · Accepted Answer

An average cost pricing rule allows the firm to cover its costs, including a normal profit, resulting in zero economic profit.

When Used with a Natural Monopoly,an Average Cost Pricing Rule