Question

suppose that the government decides to regulate this natural monopolist by requiring the firm to charge a price of p2. which is true if the government takes this approach? a socially optimal quantity of the good will result. the firm will earn a higher profit because it is selling a larger quantity. consumer surplus will increase. the firm will earn a negative economic profit.

Answer 1

If the government decides to regulate this natural monopolist by requiring the firm to charge a price of p2 it will result in consumer surplus will increase.

Government is the system or group of people that run an organized community, usually a state. In the case of its broad association definition, government usually includes the legislative, executive, and judicial branches.

Government is the vehicle by which an organization's policies are enforced, as well as a mechanism for policy determination. In many countries, government has some sort of constitution, which states its guiding principles and philosophy. The main types of political systems in the modern era are democracy, monarchy, and authoritarian and totalitarian regimes.

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