In Regulating a Natural Monopoly, the Price Strategy That Ensures

Multiple Choice

In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price

A) equal to average total cost where it intersects the demand curve.
B) equal to marginal cost where it intersects the demand curve.
C) equal to average variable cost where it intersects the demand curve.
D) corresponding to the demand curve where marginal revenue equals zero.