Multiple Choice
If a monopolist's production process has economies of scale and average cost exceeds marginal cost, then
A) the government should set price equal to marginal cost.
B) if the government sets price equal to marginal cost, the monopoly will go out of business.
C) if the government sets price equal to average cost, the monopoly will go out of business.
D) the government cannot regulate price.
Correct Answer:
Verified
Correct Answer:
Verified
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