Question

True or false ? Cost-plus regulation allows natural monopolies to earn zero economic profit.

Answer 1

Answer:

I believe it is true

Explanation:

Cost-plus is essentially regulations that are made by the government in which the price can change over a period of time based on their rate of profit. Think of brands like supreme their logo gained a large profit and has been expanded/ripped off by other small chain companies. The cost price regulation comes into play when the government sees that this logo is being ripped off yet is allowing it so supreme does not create as much profit of it since people are buying off smaller chains. And because of this supreme isn't able to monopolize based off their logo. (Hope this helps :) )