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Which of the Following Will Be True If a Regulator

Question 11

Multiple Choice

Which of the following will be true if a regulator uses average-cost pricing to regulate a natural monopoly?


A) The natural monopoly will incur losses.
B) The output will be lower than that of an unregulated monopoly.
C) There will be an efficiency gain in the market.
D) The firm will benefit more than the consumers.

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