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    Economics Principles and Policy Study Set 2
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    Exam 14: Limiting Market Power: Antitrust and Regulation
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    Setting Price Equal to Marginal Cost in a Natural Monopoly
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Setting Price Equal to Marginal Cost in a Natural Monopoly

Question 138

Question 138

Multiple Choice

Setting price equal to marginal cost in a natural monopoly will lead to


A) excess profits for the firm.
B) losses for the firm.
C) zero profits for the firm.
D) One cannot tell without further information.

Correct Answer:

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