If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist w

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If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist w

ill a. produce a lower quantity of output than is socially optimal. b. earn economic profits. c. earn zero economic profits. d. earn economic losses.

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1 answer:

Wittaler [7] · Answer 1 · 2023-03-28T01:23:15+03:00

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will earn economic losses. This is further explained below.

<h3>What is government regulation?</h3>

Generally, government regulation is simply defined as regulations established by the government that serve to outline the parameters within which certain actions are considered lawful.

In conclusion, Most rules are written in plain English.

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